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Full text of "United States Court of Appeals For the Ninth Circuit"

F 2302 



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■ 

No. 11668 

IN THE 

United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



WILLIAM A. CARMICHAEL, District Director, Im- 
migration and Naturalization Service, United States 
Department of Justice, District 16, 

Appellant, 



vs. 
WONG CHOON HOI, 



Appellee. 



TRANSCRIPT OF RECORD 

Upon Appeal from the District Court of the United States 

for the Southern District of California, 

Central Division 



FIL* 



otr 



PMK. P, O'BRIEN, 



Parker & Company, Law Printers, Los Angeles. Phone TR. 5206. 



No. 11668 

IN THE 

United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



WILLIAM A. CARMICHAEL, District Director, Im- 
migration and Naturalization Service, United States 
Department of Justice, District 16, 

Appellant, 



vs. 
WONG CHOON HOI, 



Appellee. 



TRANSCRIPT OF RECORD 

Upon Appeal from the District Court of the United States 

for the Southern District of California, 

Central Division 



Parker & Company, Law Printers, Los Angeles. Phone TR. 5206. 



INDEX 

[Clerk's Note : When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record are 
printed literally in italics ; and likewise, cancelled matter appearing in the 
original certified record is printed and cancelled herein accordingly. When 
possible an omission from the text is indicated by printing in italics the 
two words between which the omission seems to occur.] 

Page 
Appeal : 

Notice of 16 

Order Directing Clerk to Certify Records State- 
ment of Points on (Circuit Court) 16 

Certificate of Clerk 17 

Memorandum of Decision 10 

Names and Addresses of Attorneys 1 

Notice of Appeal 16 

Naturalization Petitions Recommended to Be Denied.... 13 

Order of Court Granting Petitions for Naturaliza- 
tion 15 

Order Directing Clerk to Certify Naturalization 
Records 16 

Petition for Naturalization 2 

Statement of Points on Appeal (Circuit Court) 19 



NAMES AND ADDRESSES OF ATTORNEYS 



For Appellant: 



NU 



JAMES M. CARTER, 
United States Attorney, 

RONALD WALKER, 

Assistant United States Attorney, 

600 U. S. Post Office and Court House Bldg. 
Los Angeles 12, Calif. 

For Appellee: 

BENJAMIN W. HENDERSON 

417 South Hill Street 

Los Angeles 13, Calif. [1*] 



*Page number appearing at foot of Certified Transcript. 



2 William A, Carmichael, etc. 

Original 73 

(To be retained by No. 126123 

Clerk of Court) 

UNITED STATES OF AMERICA 

PETITION FOR NATURALIZATION 

[Of a Married Person, under Sec. 310 (a) of (b), 
3+4- or- 3+2, of the Nationality Act of 1940 (54 
Stat. 1144-1145)] 

To the Honorable the District Court of The United States 
at Los Angeles, Calif. 

This petition for naturalization, hereby made and filed 
pursuant to Section 310(a) of (b), or Section ■$** of 
3^s, of the Nationality Act of 1940, respectfully shows: 

(1) My full, true, and correct name is Wong Choon 
Hoi 

(Full, true name, without abbreviation, and any other name which 
has been used, must appear here) 

(2) My present place of residence is 1606 Court St. 

(Number and street) 

Los Angeles, 26, Cal. (3) My occupation is Merchant 

(City or town) (County) (State) 

(4) I am 31 years old. (5) I was born on July 7, 

(Month) (Day) 

1914, in Hen-Kong-Hoiping, China 

(Year) (City or town) (County, district, province, or state (Country) 

(6) My personal description is as follows: Sex male; 
color yellow complexion med. color of eyes brn, color 
of hair blk, height 5 feet 5 inches, weight 160 pounds; 
visible distinctive marks scar above bridge of nose; 
scars on jaw & neck; race whte; present nationality 
China 



vs. Wong Choon Hoi 3 

(7) I am married; the name of my wife or husband is 
June; we were married on Oct. 5, 1941 at Los Angeles, 

(Month) (Day) (Year) (City or town) 

CaL; he or she was born at Hoi Sun, China, on 

(Stateor country) (City or town) (County, district, (Country) (Month) (Day) 

province, or state) 

1925 entered the United States at San Pedro, Cal. 

(Year) (City or town) (State) 

on Sept. 20, 1935 for permanent residence in the United 

(Month) (Day) (Year) 

States, and now resides at with me and was naturalized 

( Number and street ) ( City or town ) ( State or country ) 

on at 

(Month) (Day) (Year) (City or town) (State) 

certificate No ; or became a citizen by a citizen 

by birth abroad to an American citizen 

(7a) (If petition is filed under Section 311, Nationality 
Act of 1940) I have resided in the United States in mari- 
tal union with my United States citizen spouse for at least 
1 year immediately preceding the date of filing this peti- 
tion for naturalization. 

(7b) (If petition is filed under Section 312, Nationality 
Act of 1940) My husband or wife is a citizen of the 
United States, is in the employment of the Government 
of the United States, or of an American institution of 
research recognized as such by the Attorney General of 
the United States, or an American firm or corporation 
engaged in whole or in part in the development of foreign 
trade and commerce of the United States, or a subsidiary 
thereof; and such husband or wife is regularly stationed 
abroad in such employment. I intend in good faith to take 
up residence within the United States immediately upon 
the termination of such employment abroad. 



4 William A. Carmichael, etc. 

(8) I have 2 3 children; and the name, sex, date and 
place of birth, and present place of residence of each of 
said children who is living, are as follows: Daniel (m) 
8-9-42-Calif; res. with me; Linda (f) 1 1-9-43-Calif ; res. 
with me John (m) 8-9-45-Calif ; res. with me. 

(9) My last place of foreign residence was Hen-Kong, 

(City or town) 

China (10) I emigrated to the United States from 

( County, district province, ( Country) 
or state) 

Hongkong China (11) My lawful entry for permanent 

(City or town) (Country) 

residence in the United States was at San Pedro, Calif. 

(City or town) (State) 

under the name of Choon Hoi Wong As the son of a 
Merchant under S c.3(6) of the Immigration Act of 
1924 on Nov. 24, 1934 on the SS Pres. Coolidge as 

(Month) (Day) (Year) (Name of vessel or other means of 

conveyance) 

shown by the certificate of my arrival attached to this 
petition. 

(12) Since my lawful entry for permanent residence 
I have not been absent from the United States, for a 
period or periods of 6 months or longer, as follows: 



(13) (Declaration of intention not required) (14) It 
is my intention in good faith to become a citizen of the 
United States and to renounce absolutely and forever all 
allegiance and fidelity to any foreign prince, potentate, 
state, or sovereignty of whom or which at this time I am 
a subject or citizen, and it is my intention to reside perma- 
nently in the United States. (15) I am not, and have not 
been for the period of at least 10 years immediately pre- 



vs. Wong Choon Hoi 5 

ceding the date of this petition, an anarchist; nor a be- 
liever in the unlawful damage, injury, or destruction of 
property, or sabotage; nor a disbeliever in or opposed to 
organized government; nor a member of or affiliated with 
any organization or body of persons teaching disbelief in 
or opposition to organized government. (16) I am able 
to speak the English language (unless physically unable 
to do so). (17) I am, and have been during all of the 
periods required by law, attached to the principles of the 
Constitution of the United States and well disposed to 
the good order and happiness of the United States. (18) 
I have resided continuously in the United States of 
America for the term of 3 year.... at least immediately 
proceding the date of this petition, to wit: since Nov. 24, 

(Month) (Day) 

1934 (19) I have not heretofore made petition for nat- 

(Year) 

uralization number on at 

(Month) (Day) (Year) (City or town) 

in the 

(County) (State) (Name of court) 

Court, and such petition was dismissed or denied by that 

Court for the following reasons and causes, to wit: 

and the 

cause of such dismissal or denial has since been cured or 
removed. 

(20) Attached hereto and made a part of this, my pe- 
tition for naturalization, are a certificate of arrival from 
the Immigration and Naturalization Service of my said 
lawful entry into the United States for permanent resi- 
dence (if such cerificate of arrival be required by the 
naturalization law), and the affidavit of at least two veri- 
fying witnesses required by law. 



6 William A. Carmichael, etc. 

(21) Wherefore, I, your petitioner for naturalization, 
pray that I may be admitted a citizen of the United States 
of America, and that my name be changed to Harry 
U H" Wong 

(22) I, aforesaid petitioner, do swear (affirm) that I 
know the contents of this petition for naturalization sub- 
scribed by me, that the same are true to the best of my 
own knowledge, except as to matters therein stated to be 
alleged upon information and belief, and that as to those 
matters I believe them to be true, and that this petition is 
signed by me with my full, true name: So Help Me God. 

WONG CHOON HOI 

(Full, true and correct signature of petitioner, without abbreviation) 

bms [2] 

AFFIDAVIT OF WITNESSES 

The following witnesses, each being severally, duly, and 
respectively sworn, depose and says: 

My name is Isabel Cholakian my occupation is Nur- 
sery Home I reside at 1863 Blake Ave. Los Angeles, 

(Number and street) (City or town) 

Calif. 

(State) 

My name is Jimmy L. Wong my occupation is Clerk 
I reside at 1606 Court St. Los Angeles, Calif. 

(Number and street) (City or town) (State) 

I am a citizen of the United States of America: I have 
personally known and have been acquainted in the United 
States with Wong Choon Hoi, the petitioner named in 
the petition for naturalization of which this affidavit is 
a part, since Aug. 1942 to my personal knowledge the 

(Month) ( Day) (Year) 



vs. Wong Choon Hoi 7 

petitioner has resided, immediately preceding the date of 
riling this petition, in the United States continuously 
since the date last mentioned, and I have personal knowl- 
edge that the petitioner is now and during all such period 
has been a person of good moral character, attached to 
the principles of the Constitution of the United States, 
and well disposed to the good order and happiness of the 
United States, and in my opinion the petitioner is in every 
way qualified to be admitted a citizen of the United 
States. 

I do swear (affirm) that the statements of fact I have 
made in this affidavit of this petition for naturalization 
subscribed by me are true to the best of my knowledge 
and belief: So Help Me God. 

ISABEL CHOLAKIAN. 

(Signature of witness) 

JIMMY L. WONG. 

(Signature of witness) 

Subscribed and sworn to before me by the above-named 
petitioner and witnesses, in the respective forms of oath 
shown in said petition and affidavit, in the office of the 
Clerk of said Court at Los Angeles, Cal. this 4th day of 
Sept., Anno Domini 1945. I hereby certify that Certifi- 
cate of Arrival No. 23 133432 from the Immigration and 
Naturalization Service, showing the lawful entry for 
permanent residence of the petitioner above named, has 
been my me filed with, attached to, and made a part of 
this petition on this date. 

EDMUND L. SMITH, 
Clerk U. S. District Court, Southern District of 
California. 

By Geo. E. Ruperich, 

Deputy Clerk. 



8 Willia-m A. Carmichael, etc. 

OATH OF ALLEGIANCE 

I hereby declare, on oath, that I absolutely and entirely 
renounce and abjure all allegiance and fidelity to any 
foreign prince, potentate, state, or sovereignty of whom 
or which I have heretofore been a subject or citizen; that 
I will support and defend the Constitution and laws of 
the United States of America against all enemies, foreign 
and domestic; that I will bear true faith and allegiance to 
the same; and that I take this obligation freely without 
any mental reservation or purpose of evasion: So Help 
Me God. In acknowledgment whereof I have hereunto 
affixed my signature. 

WONG CHOON HOI 

(Signature of Petitioner) 

_^ O^ y±, ^U O* ■■> XJ** <Lf v' - 

Jfi ^X ^^ ^K ^^ *^ ^* ^^ *J* 

Note. — In renunciation of title or order of nobility, 
add the following to the oath of allegiance before it is 
signed: "I further renounce the title of (give title or 
titles) which I have heretofore held," or "I further re- 
nounce the order of nobility (give the order of nobility) 
to which I have heretofore belonged." 

Petition granted: Line No of List No. 6641237 

and Certificate No issued. 

Petition denied: List No 3-4-47 

Petition continued from to 

Reason 

[Stamped]: Seal of U. S. District Court, Southern 
District of California. [3] 



vs. Wong Choon Hoi 9 

No. 23 133432 

CERTIFICATE OF ARRIVAL 

I Hereby Certify that the immigration records show 
that the alien named below arrived at the port, on the 
date and in the manner shown, and was lawfully admitted 
to the United States of America as the son of a merchant 
under Sec. 3(6) of the Immigration Act of 1924. 

Name: Choon Hoi Wong 

Port of entry: San Pedro, California 

Date: November 24, 1934 

Manner of arrival: SS President Coolidge 

I Further Certify that this certificate of arrival is 
issued under authority of and in conformity with the 
provisions of the Nationality Act of 1940 solely for the 
use of the alien herein named and only for naturalization 
purposes. 

In Witness Whereof this Certificate of Arrival is is- 
sued July 10, 1945. 

[Stamped] ' DEPARTMENT OF JUSTICE 

UGO CARUSI 

Commissioner 
eg 

[Endorsed] : Filed Sep. 4, 1945. [4] 



10 William A. Carmichael, etc. 

In the District Court of the United States 
Southern District of California 

Central Division 
No. 246/P/126123 

In the Matter of the Petition of 
WONG CHOON HOI 
for Naturalization 

MEMORANDUM OF DECISION 

Wong Choon Hoi, a native-born Chinese, has filed his 
petition to be naturalized as a citizen of the United 
States. The petition is predicated upon the claim that 
petitioner resided continuously in this country for more 
than three years immediately preceding the filing of his 
petition, is married to a citizen of the United States, and 
has met all other requirements specified in §310(b) of 
the Nationality Act of 1940. [8 U.S.C. §710(b).] 

There is no controversy as to the facts. Petitioner's 
father, Wong Yung San, a Chinese merchant, was ad- 
mitted to this country in 1922 pursuant to Article II of 
the Treaty of 1880 between the United States and China. 
Petitioner was admitted in 1934 as an unmarried minor 
child of a resident [5] Chinese "treaty trader." 

Both father and son have resided here continuously 
since their respective entries, and both are merchants en- 
gaged in trade. In 1941 petitioner married a born citi- 
zen of the United States. In 1943 Chinese persons were 
made eligible for naturalization by amendment to §303 of 
the Nationality Act of 1940. [8 U.S.C. §703.1 

Section 310(b) provides that: "Any alien who, on or 
after May 24, 1934, has married or shall hereafter marry 



vs. Wong Choon Hoi 11 

a citizen of the United States . . . may, if eligible 
for naturalization, be naturalized upon full and complete 
compliance with all requirements of the naturalization 
laws, with the following exceptions: (!) No declaration 
of intention shall be required; (2) In lieu of the five- 
year period of residence within the United States, and the 
six months' period of residence in the State where the 
Petitioner resided at the time of filing the petition, the 
petitioner shall have resided continuously in the United 
States for at least three years immediately preceding the 
filing of the petition." [8 U.S.C. §710(b).] 

The Commissioner of Immigration and Naturalization 
opposes the petition urging: that the three-years' "resi- 
dence" [6] specified in §310(b) could only be acquired 
following admission for permanent residence, that peti- 
tioner's entry was not for permanent residence, but was 
made pursuant to §3(6) of the Immigration Act of 1924 
[8 U.S.C. §203(6)], hence for temporary residence. 

I am unable to perceive any sound basis for the Com- 
missioner's opposition. Precedent of long standing holds 
that where, as in the proceeding at bar, a Chinese mer- 
chant was admitted to this country prior to 1924 pursuant 
to the Treaty of 1880, members of his family (wife and 
unmarried minor children) coming after 1924 are entitled 
to be admitted for permanent residence by virtue of the 
Treaty. [Cheung Sum Shee v. Nagle, 268 U. S. 336 
(1925); Hafr v. Yung Poy, 68 F. (2d) 203 (C C A. 
9th, 1933).] 

These decisions are to be respected as determining the 
character of residence for which petitioner was admitted. 
The fact that Chinese persons were ineligible for natural- 
ization until the 1943 amendment cannot affect the char- 



12 William A. Carmichael, etc. 

acter of that residence. [Petition of Chi Yan Cham 
Louie, No. 39,067 (W. D. Wash., unreported decision of 
Judge Black, August 29, 1946).] 

Long before the Nationality Act of 1940, Chinese mer- 
chants admitted to engage in business here pursuant to 
the [7] Treaty of 1880 were referred to as "domiciled" 
in this country. [Cheung Sum Shee v. Nagle, supra, 268 
U. S. at p. 344; United States v. Mrs. Gue Lim, 176 U. 
S. 459 (1900) ; Lau Ow Bew v. United States, 144 U. S. 
47 (1892); Wong Yow v. Weedin, 33 F. (2d) 377 (C. 
C. A. 9th, 1929); Woo Hoo v. White, 243 Fed. 541 
(C. C. A. 9th, 1917).] 

The term "residence", as used in the naturalization 
statutes, is practically synonymous with "domicile." [Pe- 
tition of Wright, 42 F. Supp. 306, 307 (E. D. Mich., 
1941; United States v. Parisi, 24 F. Supp. 414, 419 
(D. C. Md., 1938); Petition of Oganesoff, 20 F. (2d) 
978, 980 (S. D. Cal., 1927); United States v. Shanahan, 
232 Fed. 169, 172 (E. D. Pa., 1916).] 

Being a minor when he entered this country, petitioner 
acquired at that time the domicile of his father. There 
has been no suggestion of any act or expression of intent 
indicating change of domicile either before or after peti- 
tioner became emancipated upon attaining majority. 

Indeed all the facts in evidence are to the contrary. 
Petitioner has been present and engaged in business in 
this country for twelve years and more since his admis- 
sion for permanent residence. During the past five years 



vs. Wong Choon Hoi 13 

he has been manrd to a citizen of the United States by 
birth, and is now the father of three children born in this 
country. [8] 

Accordingly it must be held that petitioner has more 
than met the three-year residence requirement of §3 10(b) 
of the Nationality Act of 1940. The petition of Wong 
Choon Hoi is granted. 

February 17, 1947. 

WM. C. MATHES 

United States District Judge 

[Endorsed] : Filed Feb. 17, 1947. [9] 



Book 10 Page 333 
Date March 4, 1947 List No. 1 
This list consists of two sheets. Sheet No. 1. 

NATURALIZATION PETITIONS 
RECOMMENDED TO BE DENIED 

To the Honorable the District Court of the United 
States sitting at Los Angeles, Calif. 

H. B. Terrill, K. Parker duly designated under the 

(Name(s) of designated officer(s)) 

Nationality Act of 1940 (54 Stat. 1156) to conduct pre- 
liminary hearings upon petitions for naturalization to the 
above-named Court and to make findings and recommen- 
dations thereon, has personally examined under oath at a 
preliminary hearing the following two (2) petitioners for 



14 



William A. Carmichael, etc. 



naturalization and their required witnesses, has found for 
the reasons stated below, that such petitions should not 
be granted, and therefore recommends that such petitions 
be denied. 



No. 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 



Petition No. Name of Petitioner 

4079-M Josip Bozin 



126123 Wong Choon Hoi 



Reason for Denial 

Petitioner was not law- 
fully admitted to the 
United States as con- 
templated by Section 
701 of the Nationality 
Act as amended. 

( 1 ) There was not filed 
with the petition a 
valid certificate show- 
ing the date, place and 
manner of the peti- 
tioner's arival in the 
United States, and (2) 
that petitioner has 
failed to establish con- 
tinuous legal residence 
in the United States 
for the period required 
bv law. 



* 



Respectfully submitted, 

F. J. BURNS 

(Signature of officer in attendance at final hearing) 



Date March 4, 1947. [10] 



vs. Wong Choon Hoi 15 

Original 

Book 10 Page 334 

Date March 4, 1947 List No. 1 

This list consists of two sheets. Sheet No. 2 

ORDER OF COURT 

State of California 

County of Los Angeles — ss: 

In the District Court of the United States 
Upon consideration of the petitions for naturalization 
listed on List No. 1 (sheet (s) 1 te dated March 4, 1947, 
presented in open Court this 4th day of March, A. D., 
1947, It Is Hereby Ordered that each of the said peti- 
tions be, and hereby is, denied, except those petitions 
listed below . 

Recommendation of Designated Officer Is Disapproved 
as to the Petitions listed Below, and each of said petition- 
ers so listed having appeared in person, It Is Hereby Or- 
dered that each of them be, and hereby is, admitted to be- 
come a citizen of the United States of America. Prayers 
for change of name listed below granted, except m pcti 
tion(s) £for 

Petition No. Name of Petitioner Change of Name 

1 4079-M JosipBozin Joe Bozin 

2 126123 Wong Choon Hoi Harry H. Wong 

5|C 5{C 5JC JjC 5JC JjC #1* <|% 3|* 

It is further ordered that petitions listed below be con- 
tinued for the reasons stated. 

Petition No. Name of Petitioner Cause for Continuance 

»1* *l* - '.' * I' ^lf ^tr ^tf ^Jf ^lf 

*f+ >j* *^ *^ ^y* *j* *j* *|* *j* 

By the Court. 

WM. C. MATHES 

Judge. [11] 



16 William A. Carmichael, etc. 

[Title of District Court and Cause] 

NOTICE OF APPEAL 

You Will Please Take Notice that William A. Car- 
michael, District Director, Immigration and Naturaliza- 
tion Service, United States Department of Justice, Dis- 
trict 16, the respondent and appellant herein, hereby ap- 
peals to the United States Circuit Court of Appeals for 
the 9th Circuit from the Judgment and Order of the 
above-entitled District Court entered March 4, 1947, and 
from the whole thereof, granting the petition for natural- 
ization of said Wong Choon Hoi. 

JAMES M. CARTER 
United States Attorney 

RONALD WALKER 

Assistant United States Attorney 
Attorneys for Respondent and Appellant 

[Endorsed] : Filed & mid. copy to Ben Henderson, 
atty. for petnr., Jun. 3, 1947. [12] 



[Title of District Court and Cause] 

ORDER DIRECTING CLERK TO MAKE CERTIFI- 
CATION OF NATURALIZATION RECORDS. 

It appearing that William A. Carmichael, District Di- 
rector, Immigration and Naturalization Service, United 
States Department of Justice, District 16, the respondent 
and appellant herein, has filed a notice of appeal on June 
3, 1947, in the above matter and is now in the process of 



vs. Wong Choon Hoi 17 

perfecting said appeal; and it also appearing that under 
Section 341(e) of the Nationality Act of 1940 (Title 8 
USC 74(e)) the Clerk is prohibited from making certifi- 
cation of naturalization records without an order of 
Court; and good cause appearing therefor 

It Is Hereby Ordered that the Clerk of this Court is- 
sue its certification of the following naturalization records 
in the above-entitled action, to wit: 

1. Petition for Naturalization. 

2. Certificate of Arrival. 

3. Recommendation of denial of citizenship by the Im- 
migration and Naturalization Service. 

4. Order of Court granting petition for naturalization 
dated March 4, 1947. [15] 

Dated this 25th day of June, 1947. 

WM. C MATHES 

District Judge 

[Endorsed]: Filed Jun. 25, 1947. [16] 



[Title of District Court and Cause] 

CERTIFICATE OF CLERK 

I, Edmund L. Smith, Clerk of the District Court of the 
United States for the Southern District of California, 
do hereby certify that the foregoing pages numbered 
from 1 to 18 inclusive contain full, true and correct copies 
of Petition for Naturalization; Certificate of Arrival; 



18 William A. Carmichael, etc. 

Memorandum of Decision; Naturalization Petitions Rec- 
ommended to be Denied; Order of Court; Notice of Ap- 
peal; Statement of Points on Appeal; Order Directing 
Clerk to Make Certification of Naturalization Records 
and Stipulation for Record on Appeal which constitute 
the record on appeal to the United States Circuit Court 
of Appeals for the Ninth Circuit. 

Witness my hand and the seal of said District Court 
this 26th day of June, A. D. 1947. 

(Seal) EDMUND L. SMITH, 

Clerk, 

By Theodore Hocke, 
Chief Deputy Clerk. 
TH/a 

[Endorsed] : No. 11668. United States Circuit Court 
of Appeals for the Ninth Circuit. William A. Carmichael, 
District Director, Immigration and Naturalization Serv- 
ice, United States Department of Justice, District 16, 
Appellant, vs. Wong Choon Hoi, Appellee. Transcript of 
Record. Upon Appeal From the District Court of the 
United States for the Southern District of California, 
Central Division. 

Filed Jun. 27, 1947. 

PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals for 
the Ninth Circuit. 



vs. Wong Choon Hoi 19 

In the Circuit Court of Appeals of the United States 
In and for the Ninth Circuit 

No. 11668 

WILLIAM A. CARMICHAEL, District Director, Im- 
migration and Naturalization Service, United States 
Department of Justice, District 16, 

Appellant 

v. 

WONG CHOON HOI, 

Appellee 

STATEMENT OF POINTS ON APPEAL 

Comes Now Appellant William A. Carmichael, Dis- 
trict Director, Immigration and Naturalization Service, 
United States Department of Justice, District 16, and 
files herewith his statement of the points on which he 
intends to rely on the appeal in the above matter: 

1. The District Court erred in holding and deciding 
that petitioner was admitted to the United States for 
permanent residence under the Treaty of Commerce and 
Navigation with China in 1888 (22 Stat. 826) for natur- 
alization purposes. 

2. The District Court erred in holding and deciding 
that petitioner's admission to the United States consti- 
tuted lawful permanent residence for naturalization pur- 
poses. 



20 William A. Carmichael, etc. 

3. The District Court erred in failing to hold and 
decide that petitioner was admitted to the United States 
temporarily as a non-immigrant alien under Section 3(6) 
of the Act of May 26, 1924, Title 8 USC 203). 

4. The District Court erred in admitting petitioner to 
citizenship. 

Dated this 8th day of July, 1947. 

JAMES M. CARTER, 

United States Attorney 

RONALD WALKER 

Assistant United States Attorney 

Attorneys for Appellant 

Received copy of the within documents this 2nd day 
of July, 1947. Benjamin W. Henderson, Attorney for 
Appellee, by Sue Ganser. 

[Endorsed] : Filed Jul. 1, 1947. Paul P. O'Brien, 
Clerk. 



No. 11668 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



William A. Carmichael, District Director, Immigration 
and Naturalization Service, United States Department 
of Justice, District No. 16; 

Appellant, 

vs. 

Wong Choon Hoi, 

Appellee. 



APPELLANT'S BRIEF. 



James M. Carter, 

United States Attorney; 

Ronald Walker, 

Assistant United States 
Attorney, 

United States Postoffice and 
Courthouse Bldg., Los Angeles (12), 

Attorneys for Appellant. 

Bruce G. Barber, 

Chief, District Adjudications Division 

Immigration and Naturalization Service, 

on the Brief. 
^PMWK 

Parker & Company, Law Printers, Los Angeles. Phone TR. 5206. 



TOPICAL INDEX 

PAGE 

Jurisdiction 1 

Treaties, Proclamations, Statutes and Regulations 2 

Statement of the case 17 

Summary of the facts 18 

Specification of errors 19 

Argument 20 

The appellee does not meet the lawful permanent residence re- 
quirement which is a condition precedent to naturalization 20 

Admission after the Immigration Act of 1924 of the minor son 
of a Chinese merchant, admitted prior to that Act, does not 
constitute lawful permanent residence for naturalization pur- 
poses 27 

The repeal of the Chinese Exclusion Acts did not contemplate 
that Chinese in this country under a mercantile status would 
become eligible for naturalization 30 

Conclusion 38 



11. 

TABLE OF AUTHORITIES CITED 

Cases page 

Cheung Sum Shee v. Nagle, 268 U. S. 336, 45 S. Ct. 539, 69 

L. Ed. 985 27 

Chung Yim v. United States, 78 F. (2d) 43 36 

Fanfariotis v. United States, 63 F. (2d) 352 22 

Haff v. Yung Poy, 29 F. (2d) 999 29 

Jensen, In re, 11 F. (2d) 414 22 

Kaplan v. Tod, 267 U. S. 228, 45 S. Ct. 257, 69 L. Ed. 585 22 

Lau Ow Bew v. United States, 144 U. S. 47, 12 S. Ct. 517, 36 

L. Ed. 340 36 

Olson, In re, 18 F. (2d) 425 22 

Sadi v. United States, 48 F. (2d) 1040 22 

Sinmiolkjier, In re, 71 Fed. Supp. 553 23 

Stapf v. Corsi, 287 U. S. 129, 53 S. Ct. 40, 77 L. Ed. 215 22 

Tutun v. United States, 270 U. S. 568, 46 S. Ct. 425, 70 L. Ed. 

738 2 

United States v. Beda. 118 F. (2d) 458 22 

United States v. Kreticos, 40 F. (2d) 1020 22 

United States v. Mrs. Gue Lim, 176 U. S. 459, 20 S. Ct. 415, 44 

L. Ed. 544 27 

United States v. Parisi, 24 Fed. Supp. 414 22, 25 

United States v. Rodiek, 162 Fed. 469 2 

United States v. Silver, 55 F. (2d) 250 22 

United States v. Wong Young, 223 U. S. 67, 32 S. Ct. 195, 56 
L. Ed. 354 36 

Weig, In re, 30 F. (2d) 418 22 

Werblow v. United States, 134 F. (2d) 791 23 

Wong Choon Hoi, Petition of, 71 Fed. Supp. 160 18 

Yee Won v. White, 256 U. S. 399, 41 S. Ct. 504, 65 L. Ed. 

1012 36 

Zartavian v. Billings, 204 U. S. 170, 27 S. Ct. 182, 51 L. Ed. 428 22 



• • • 

111. 



Miscellaneous page 

House Report 732 13, 30 

Senate Report 535, 78th Cong., 1st Sess., p. 3 13, 14, 20, 32 

Senate Report 535, 78th Cong., 1st Sess., p. 6 13, 30 

Treaty Between the United States and China on Immigration 

(22 Stat. L. 826) 2 

Statutes 

Act of September 13, 1880, Sec. 13 (25 Stat. 476, 477) 35 

Act of July 5, 1884 (22 Stat. L. 58; 23 Stat. L. 115) 4 

Act of May 5, 1892 (27 Stat. L. 25) 4 

Act of May 5, 1892, Sec. 2 (27 Stat. 25) 31, 34, 35 

Act of May 5, 1892, amended by Act of November 3, 1893 (28 

Stat. 7) 6, 34, 35 

Act of April 29, 1902 (32 Stat. L. 176) 4 

Act of April 27, 1904 (33 Stat. L. 428) 4 

Act of July 6, 1932 (47 Stat. 607; 8 U. S. C. 203) 9, 18 

Chinese Exclusion Repeal Act (57 Stat. 600, Sec. 303) 13, 30 

Code of Federal Regulations, Title 8, Sec. 110.27 11, 21 

Code of Federal Regulations, Title 8, Sec. 110.29 (a), (b), (c) 11 

Code of Federal Regulations, Title 8, Sec. 125.5 9 

Code of Federal Regulations, Title 8, Part 142 31 

Code of Federal Regulations, Title 8, Sec. 322.1 17, 20 

Code of Federal Regulations, Title 22, Sec. 61.316 31 

Commissioner of Immigration Chinese Rules, Rule 18, par. 5 12 

Immigration Act of 1924, Sec. 3(6), (43 Stat. 154; 8 U. S. C. 

203 8, 9, 17, 18, 19, 21, 26, 27, 28, 29, 35 

Immigration Act of 1924, Sec. 4, Subds. (a) to (f), (43 Stat. 

155; 44 Stat. 812; 45 Stat. 109; 46 Stat. 854; 47 Stat. 656; 

8U. S. C. 204) 9, 21, 29, 31 

Immigration Act of 1924, Sec. 11 31 



IV. 

PAGE 

Immigration Act of 1924, Sec. 14 (43 Stat. 162; 8 U. S. C. 

214) 12 

Immigration Act of 1924, Sec. 15 (43 Stat. 162; 47 Stat. 524, 

525; 54 Stat. 711 ; 57 Stat. 669; 8 U. S. C. 215, Sec. 7(d)). .9, 10 

Immigration Act of 1924, Sec. 24 (43 Stat. 166; 8 U. S. C. 

224) 7, 11, 12, 21 

Judicial Code, Sec. 128 (28 U. S. C, Sec. 225(a)) 2 

Nationality Act of 1940: 

Sec. 301(a), (54 Stat. 1140; 8 U. S. C. 701(a)) 1 

Sec. 309(a), (54 Stat. 1143; 8 U. S. C. 709) 20 

Sec. 310(a), (54 Stat. 1144; 8 U. S. C. 710) 20 

Sec. 310(b), (54 Stat. 1145; 8 U. S. C. 710(b)) 1, 17 

Sec. 327 (54 Stat. 1150; 8 U. S. C. 727) 17, 20 

Sec. 328(a), (54 Stat. 1151-58; 8 U. S. C. 728) 13 

Sec. 329(b), (54 Stat. 1152; 8 U. S. C. 729) 14, 15, 20, 24 

Sec. 331(a) (11), (54 Stat. 1153-54; 8 U. S. C. 731) 16, 20 

Sec. 332(a) (11), (54 Stat. 1154-56; 8 U. S. C. 732) 16, 20 



No. 11668 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



William A. Carmichael, District Director, Immigration 
and Naturalization Service, United States Department 
of Justice, District No. 16, 

Appellant, 

vs. 

Wong Choon Hoi, 

Appellee. 



APPELLANT'S BRIEF. 



Jurisdiction. 

The petition of the appellee for admission to citizenship 
under Section 310(b) of the Nationality Act of 1940 (54 
Stat. 1145; 8 U. S. C. 710(b)) was filed in the United 
States District Court on September 4, 1945 [R. 2-7]. 

The jurisdiction to naturalize aliens as citizens of the 
United States is conferred upon the District Courts by 
Section 301(a) of the Nationality Act of 1940 (54 Stat. 
1140; 8 U. S. C. 701(a)). 

The decision of the District Court granting the petition 
was filed February 17, 1947 |R. 10-13], and order ad- 
mitting appellee to citizenship was entered on March 4, 
1947 [R. 15]. Notice of appeal was filed on June 3, 1947 



— 2— 

[R. 16], and transcript of record was filed in this Honor- 
able Court on June 27, 1947 [R. 18, 19]. 

Jurisdiction is conferred upon this Honorable Court to 
review the final judgments of the district courts of the 
United States by section 128 of the Judicial Code, as 
amended (Title 28, U. S. C, sec. 225(a)), wherein it is 
provided that "the Circuit Courts of Appeals shall have 
appellate jurisdiction to review by appeal, final decisions 
* * * in the district courts/' except as otherwise pro- 
vided. 

The order of the District Court in granting the petition 
and admitting appellee to citizenship is a final decision 
within the meaning of the above law. 1 

Treaties, Proclamations, Statutes, and Regulations. 

Treaty between the United States and China, concerning 
immigration. 2 

"By the President of the United States of America. 
A Proclamation. 

'Whereas a Treaty between the United States 
* * * and China, for the modification of the exist- 
ing treaties between the two countries, by providing 
for the future regulation of Chinese immigration into 
the United States, was concluded and signed at 
Peking * * * on the seventeenth day of Novem- 
ber in the year of our Lord one thousand eight hun- 



^Tutun v. U. S., 270 U. S. 568 46 S. Ct. 425, 70 L. Ed. 738; 
U. S. v. Rod irk. L62 Fed. 469 (9th Cir.). 

L> 22 Stat. L. 826; concluded Nov. 17, 1880; ratification advised by 
the Senate May 5, 1881 ; ratified by the President May 9, 1881 ; 
ratifications exchanged July 19, 1881; proclaimed Oct. 5, 1881. 



dred and eighty, * * * which Treaty is word for 
word as follows : 

'Whereas, in * * * 1858, a treaty of peace and 
friendship was concluded between the United States 
of America and China, and to which were added, in 
* * * 1868, certain supplementary articles to the 
advantage of both parties, which supplementary 
articles were to be perpetually observed and obeyed : — 
and 

'Whereas the Government of the United States, 
because of the constantly increasing immigration of 
Chinese laborers to the territory of the United States, 
and the embarrassments consequent upon such immi- 
gration, now desires to negotiate a modification of the 
existing Treaties which shall not be in direct contra- 
vention of their spirit : — 

'Now, therefore, * * * the said Commissioners 
Plenipotentiary, having conjointly examined their full 
powers, and having discussed the points of possible 
modification in existing Treaties, have agreed upon 
the following articles in modification : 

Article I. 

'Whenever, in the opinion of the Government of the 
United States, the coming of Chinese laborers to the 
United States, or their residence therein, affects or 
threatens to affect the interests of that country, or to 
endanger the good order of the said country or of any 
locality within the territory thereof, the Government 
of China agrees that the Government of the United 
States may regulate, limit, or suspend such coming or 



residence, but may not absolutely prohibit it. 3 The 
limitation or suspension shall be reasonable, and shall 
apply only to Chinese who may go to the United 
States as laborers, other classes not being included in 
the limitations. Legislation taken in regard to 
Chinese laborers will be of such a character only as 
is necessary to enforce the regulation, limitation, or 
suspension of immigration, and immigrants shall not 
be subject to personal maltreatment or abuse. 

Article II. 

'Chinese subjects, whether proceeding to the United 
States as teachers, students, merchants, or from curi- 
osity, together with their body and household serv- 
ants, and Chinese laborers zvho are now in the United 
States shall be allowed to go and come of their own 
free will and accord, and shall be accorded all the 
rights, privileges, immunities, and exemptions zvhich 
are accorded to the citizens and subjects of the most 
favored nation. 



3 AfTected by various provisions of law, prohibiting the admission 
of Chinese laborers to the United States. By an Act of Congress 
of May 6, 1882, as amended and added to by the Act of July 5, 
1884, enforcement of the Exclusion Treaty with China was pro- 
vided for: "* * * until the expiration of ten years next after 
the passage of this Act, the coming of Chinese laborers to the 
United States * * * is * * * suspended, and during such 
suspension it shall not be lawful for any Chinese laborer to come 
from any foreign port or place, or having so come, to remain within 
the United States." (22 Stat. L. 58; 23 Stat. L. 115.) The Act 
of May 6, 1882, as amended and added to by the Act of July 5, 
1884, was continued in force for an additional period of 10 years 
from May 5, 1892, by the Act of May 5, 1892 (27 Stat. L. 25) ; 
and was, with all laws on this subject in force on April 29, 1902, 
reenacted, extended, and continued without modification, limitation, 
or condition by the Act of April 29, 1902 (32 Stat. L. 176). as 
amended by the Act of April 27, 1904 {33 Stat. L. 428). 



— 5— 

Article III. 
'If Chinese laborers, or Chinese of any other class, 
now either permanently or temporarily residing in the 
territory of the United States, meet with ill treatment 
at the hands of any other persons, the Government of 
the United States will exert all its power to devise 
measures for their protection and to secure to them 
the same rights, privileges, immunities, and exemp- 
tions as may be enjoyed by the citizens or subjects of 
the most favored nation, and to which they are en- 
titled by treaty. 

Article IV. 
'The high contracting powers having agreed upon 
the foregoing articles, whenever the Government of 
the United States shall adopt legislative measures in 
accordance therewith, such measures will be communi- 
cated to the Government of China. If the measures 
as enacted are found to work hardship upon the sub- 
jects of China, the Chinese minister at Washington 
may bring the matter to the notice of the Secretary 
of State of the United States who will consider the 
subject with him; and the Chinese Foreign Office may 
also bring the matter to the notice of the United 
States minister at Peking and consider the subject 
with him, to the end that mutual and unqualified bene- 
fit may result. 

Tn faith whereof the respective Plenipotentiaries 
have signed and sealed the foregoing at Peking, 
* * * the ratification of which shall be exchanged 
at Peking within one year from date of its execution. 

'Done at Peking, this seventeenth day of November, 
in the year of our Lord, 1880. * * * 

'And whereas the said Treaty has been duly ratified 
on both parts and the respective ratifications were 
exchanged at Peking on the 19th day of July 1881; 



'Now, therefore, be it known that I, Chester A. 
Arthur, President of the United States of America 
have caused the said Treaty to be made public to the 
end that the same and every article and clause thereof 
may be observed and fulfilled with good faith by the 
United States and the citizens thereof. 

'Done in Washington this fifth day of October in 
the year of our Lord one thousand eight hundred and 
eighty-one, * * *.' " 

The convention regulating Chinese immigration was 
concluded March 17, 1894, by which immigration of 
Chinese laborers was prohibited for ten years. By Article 
IV of that convention it was provided : 

"In pursuance of Article III of the Immigration 
Treaty between the United States and China, signed 
at Peking on the 17th day of November, 1880 * * * 
it is hereby understood and agreed that Chinese 
laborers or Chinese of any other class, either perma- 
nently or temporarily residing in the United States, 
shall have for the protection of their persons and 
property all rights that are given by the laws of the 
United States to citizens of the most favored nation, 
excepting the right to become naturalized citizens 
* * *." (Italics added.) 

By an amendment to "an act to execute certain treaty 
stipulations relating to Chinese," Congress, on November 
3, 1893, defined the term "merchant" as follows: 4 

"Sec. 2. * * * the term 'merchant,' as employed 
herein and in the acts of which this is amendatory, 
shall have the following meaning and none other : 

4 (28 Stat. L. 7.) 



'A merchant is a person engaged in buying and 
selling merchandise, at a fixed place of business, 
which business is conducted in his name, and 
who, during the time he claims to be engaged as 
a merchant, does not engage in the performance 
of any manual labor, except such as is necessary 
in the conduct of his business as such merchant/ " 
(Italics added.) 

In the Act of November 3, 1893, Congress also defined 
a "Domiciled merchant" as follows : 5 

"Where an application is made by a Chinaman for 
entrance into the United States on the ground that he 
was formerly engaged in this country as a merchant, 
he shall establish by the testimony of two creditable 
witnesses other than Chinese the fact that he con- 
ducted such business as hereinbefore defined for at 
least one year before his departure from the United 
States, and that during such year he was not engaged 
in the performance of any manual labor, except such 
as was necessary in the conduct of his business as 
such merchant, and in default of such proof shall be 
refused landings." (Italics added.) 

The Immigration Act of May 26, 1924, "to limit the 
immigration of aliens into the United States," defines its 
scope: 6 

"Sec. 25. The provisions of this Act are in addi- 
tion to and not in substitution for the provisions of 
the Immigration Laws, and shall be enforced as a part 
of such laws, * * * not inapplicable, shall apply 



5 Same as footnote 4. 

6 (43 Stat. 166; 8 U. S. C. 223.) 



to and be enforced in connection with the provisions 
of this Act. An alien, although admissible under the 
provisions of this Act, shall not be admitted to the 
United States if he is excluded by any provision of 
the Immigration Laws other than this Act, and an 
alien, although admissible under the provisions of the 
Immigration Laws other than this Act, shall not be 
admitted to the United States if he is excluded by any 
provision of this Act." 

The 1924 Immigration Act classifies all aliens entering 
the United States for permanent residence as "immi- 
grants" and "non-quota immigrants," excepting from such 
definition those entering temporarily or during a period 
requiring the maintenance of status. This latter group is 
commonly referred to as "non-immigrants." The Statute 
is in the following language : 7 

"Sec. 3. When used in this Act the term 'immi- 
grant' means any alien departing from any place out- 
side the United States destined for the United States, 
except, (1) an accredited official of a foreign govern- 
ment * * *, (2) an alien visiting the United States 

* * *, (3) an alien in continuous transit through 
the United States, (4) an alien lawfully admitted to 
the United States who later goes in transit from one 
part of the United States to another through foreign 
contiguous territory, (5) a bona fide alien seaman 

* * *, and (6) an alien entitled to enter the United 
States solely to carry on trade between the United 
States and a foreign state of which he is a National 
under and in pursuance of the provisions of a treaty 



7 (43 Stat. 154; 47 Stat. 607; 54 Stat. 711 ; 8 U. S. C. 203; Sec. 
7(c) Public Law 291, 79th Congress; Chap. 652.1, Sess., approved 
Dec. 29, 1945.) 



— 9r- 

of commerce and navigation, and his wife, and his 
unmarried children under 21 years of age, if accom- 
panying or following to join him * * *, and (7) 
a representative of a foreign government in or to an 
international organization * * * or an alien offi- 
cer or employee of such * * * organization, and 

the family, attendants, servants, and employees 
* # # >> 

Prior to amendment of July 6, 1932, the sixth sub- 
division of Section 3 read as follows : 8 

"(6) An alien entitled to enter the United States 
solely to carry on trade under and in pursuance of 
the provisions of a present existing treaty of com- 
merce and navigation/' 

"Immigrant" as above defined and "non-quota immi- 
grant" included in the following definition, constitute the 
classes of aliens whose admission to the United States is 
authorized for lawful permanent residence under the 1924 
Immigration Act : 9 

"Sec. 4. When used in this Act the term 'non- 
quota' immigrant means — '(a) An immigrant who is 



8 Act of July 6, 1932 (47 Stat. 607; 8 U. S. C. 203), amending 
Sec. 3, Act of May 26, 1924 (43 Stat. 154; 8 U. S. C. 203). 

9 (43 Stat. 155; 44 Stat. 812; 45 Stat. 1009; 46 Stat. 854; 47 
Stat. 656; 8 U. S. C. 204.) The Sec. 4(e) student "nonquota im- 
migrant" is by act of Congress specifically taken out of the class 
of aliens admitted for permanent residence by Sec. 15, Immigra- 
tion Act of 1924 (43 Stat. 162; 47 Stat. 524, 525; 54 Stat. 711 ; 57 
Stat. 669; 8 U. S. C. 215, Sec. 7(d), and is subject to deportation 
if he fails to maintain status under regulations promulgated there- 
under providing "A student who violates or fails to fulfill any of 
the conditions of his admission * * * shall be made the subject 
of deportation proceedings in accordance with the provisions of the 
applicable immigration laws * * *" (Sec. 125.5, Title 8, C. F. R.) 



—10— 

the unmarried child under twenty-one years of age, 
or the wife, or the husband, of a citizen of the United 
States: Provided, that the marriage shall have oc- 
curred prior to issuance of visa and, in the case of 
husbands of citizens, prior to July 1, 1932.' '(b) An 
immigrant previously lawfully admitted to the United 
States, who is returning from a temporary visit 
abroad.' 4 (c) An immigrant who was born in * * * 
Canada, * * * Mexico,' etc. '(d) An immigrant 
who * * * seeks to enter the United States solely 
for the purpose of, carrying on the vocation of minis- 
ter,' etc. '(e) An immigrant who is a bona fide stu- 
dent * * * who seeks to enter the United States 
solely for the purpose of study,' etc. '(f) A woman 
who was a citizen of the United States and lost her 
citizenship by reason of her marriage to an alien,' 
etc." 

Section 15 of the Immigration Act of 1924 10 requires 
maintenance of the exempt status of aliens admitted to the 
United States who are excepted from the "* * * Defi- 
nition of Immigrant and nonquota immigrant/' 

"Section IS. The admission to the United States 
of an alien excepted from the class of immigrants by 
clause 1, 2, 3, 4, 5, 6 * * * of section 3 * * * 
shall be for such time, and under such conditions as 
may be by regulations prescribed * * * to insure, 
that at the expiration of such time or upon failure to 
maintain the status under which admitted, he will 
depart from the United States * * *." 



10 (43 Stat. 162; 47 Stat. 524; 54 Stat. 711 ; 59 Stat. 669; 8 U. S. 
C. 215.) 



—11— 

The terms "status" and "trader's status" as used in the 
Immigration Act of 1924, are defined in regulations pro- 
mulgated by the Commissioner of Immigration and 
Naturalization with the approval of the Attorney General, 
as follows: 11 

"The term 'status' as used in the Immigration Act 
of 1924 means the condition of carrying on one of 
the particular limited activities for which an alien 
may be admitted under a subdivision of Section 3 of 
that Act (43 Stat. 154, 47 Stat. 607; 8 U. S. C. 
203(e)). * * * When applied to an alien * * *; 
and the term 'trader's status' means that he is ad- 
missible under Section 3 (6) and is an alien entitled 
to enter and to remain in the United States solely to 
carry on trade between the United States and the 
foreign state of which he is a national under and in 
pursuance of the provisions of a treaty of commerce 
and navigation, or the wife or unmarried child under 
21 years of age of a person so entitled whom he ac- 
companies or follows to join." 

Certain non-immigrants are admitted without time limi- 
tation so long as the status under which admitted is main- 
tained. 12 

The admission of the aliens [officials, visitors and 
traders] * * * shall be * * * on condition 
that the alien shall maintain during his temporary 
stay in the United States the specific status claimed, 
and shall voluntarily depart therefrom 'at the expira- 
tion of the time fixed, or upon failure to maintain the 
specific status wider which admitted. * * *' 



n Sec. 110.27, Title 8, C. F. R., authorized by Sec. 24, Immigra- 
tion Act of 1924 (43 Stat. 166; 8 U. S. C. 224). 

12 Sec. 110.29 (a), (b), (c), Title 8, C. F. R. 



—12— 

"(a) * * * a government official and his family 
shall be admitted without limitation of time * * * ; 
(b) * * * an alien having a trader's status shall 
be admitted without limitation of time; (c) * * * 
an alien who has been admitted as the unmarried 
minor child of a treaty trader shall be regarded as 
having maintained his specific status so long as his 
parent maintains his trader's status." 

Rule 18, paragraph 5, of the Chinese Rules of October 
1, 1926, promulgated by the Commissioner of Immigra- 
tion, with the approval of the then Secretary of Labor, 
under authority contained in Section 24 of the Im- 
migration Act of 1924, provided as follows: 13 

"Para. 5. Aliens who have been admitted as non- 
immigrants * * * under Section 3 * * * of the 
Immigration Act of 1924 * * *, and aliens ad- 
mitted under Section 3 (6) of said Act as non-im- 
migrants (together with their alien wives and minor 
children admitted at the same time or subsequently) 
who shall fail or refuse to maintain the status under 
which admitted, or to depart voluntarily when they 
have ceased to maintain such statuts; shall be taken 
into custody upon the warrant of the Secretary of 
Labor and deported in the manner provided by Sec- 
tion 14 of the Immigration Act of May 26, 1924." 

Provision is made in the Immigration Act of 1924 
for the deportation of 14 

"any alien who at any time after entering the United 
States is found * * * to have remained therein 



W(43 Stat. 166; 8 U. S. C. 224.) 

14 Sec. 14, Immigration Act of 1924 (43 Stat. 162; 8 U. S. C. 
214). 



— 1$- 

for a longer time than permitted under this Act 
or regulations made thereunder, shall be taken into 
custody and deported in the same manner as provided 
for in Sections 19 and 20 of the Immigration Act 
of 1917 * * *" 

In enacting legislation for the repeal of the Chinese 
Exclusion Laws 15 the Congressional Committee, consider- 
ing the legislation, had the following comment to make : 16 

"The number of Chinese who will actually be made 
eligible for naturalization under this Section is neg- 
ligible. There are approximately 42,000 alien 
Chinese persons in the United States (37,242 in con- 
tinental United States and 4,844 in Hawaii, according 
to the census figures of 1940). However, a large 
number of these Chinese have never been admitted 
to the United States for lawful permanent residence, 
which is a condition precedent to naturalization and, 
therefore, many of this number would not be eligible 
for naturalization, not because of racial disability, 
but because they cannot meet existing statutory re- 
quirements of law. The number of Chinese who 
will be made eligible in the future, in addition to 
those already here, will of necessity be very small 
because the quota for China is limited to 105 per 
annum, as provided for in Section 2 of this bill." 
(Italics ours.) 



15 On Dec. 17, 1943, Congress passed the Chinese Exclusion Repeal 
Act (57 Stat. 600). 

16 House Rep. 732; Sen. Rep. 535; 78th Congress, 1st Sess. (p. 6 
of Sen. Rep. 535). 



—14— 

In discussing the purpose of the repeal of the Chinese 
Exclusion Acts the Congressional Committee made the 
following comment: 17 

"The purpose of this section is to repeal all of the 
laws enacted between 1882 and 1913, dealing with 
the exclusion and deportation of Chinese persons. 
It should be stated at this point that no substantial 
gain accrues to the Chinese people through the repeal 
of these laws from a standpoint of permitting Chinese 
to enter the country who are at present denied that 
privilege because other provisions of laws subse- 
quently enacted effectively keep out persons of the 
Chinese race as well as persons of other races in- 
eligible to citizenship. It does, however, eliminate 
the undesirable laws specifically designating Chinese 
as a race to be excluded from admission to the United 
States." 

The following provisions of the Nationality Laws 
and Regulations require, as a condition precedent to 
establishing a residence for naturalization purposes, that 
an alien be admitted for lawful permanent residence. At 
the time of the admission of the appellee into the United 
States the Naturalization laws required a registry of all 
aliens to be made. 18 As a prerequisite to the issuance 



17 Sen. Rep. 535, 78th Congress, 1st Sess. (p. 3 referring to 
Sec. 1). 

18 Sec. 328(a), Nationality Act of 1940 (54 Stat. 1151-52: 8 
U. S. C. 728), effective Jan. 13, 1941. The language in this section 
was derived from a similar provision in the basic Naturalization Act 
of June 29, 1906, which was recast herein without material change. 
See Chap. 3592, Sec. 1 , 34 Stat. 596, which reads : 

"That it shall be the duty of the Bureau of Immigration * * * 
to provide, for use at the various Immigration stations through- 
out the United States, books of record, wherein the Commis- 



— 15— 

of a valid declaration of intention the Nationality Act of 
1940 requires that lawful entry for permanent residence be 
established. 19 

"No declaration of intention shall be made by any 
person who arrived in the United States after June 
29, 1906, until such person's lawful entry for per- 
manent residence shall have been established, and a 
certificate showing the date, place, and manner of 
arrival in the United States shall have been issued. 
It shall be the duty of the Commissioner, or Deputy 
Commissioner, to cause to be issued such certificate." 
(Italics ours.) 

sioners of Immigration shall cause a registry to be made in the 
case of each alien arriving in the United States from and after 
the passage of this Act, of the name, age, occupation * * * 
the place of birth, the last residence, the intended place of 
residence in the United States, and the date of arrival of said 
alien, and * * * the name of the vessel in which he comes." 

Historically, registry of aliens for naturalization purposes 
made its first appearance in the naturalization laws in the Act 
approved June 18, 1798 (1 Stat. 566-569) requiring: "* * * 
that all * * * aliens who, after the passing of this Act, 
shall continue to reside, or who shall arrive or come to reside 
in any part or place within the territory of the United States, 
shall be reported * * * to the Clerk of the District Court 
of the District, if living within ten miles of the port or place, 
in which their residence or arrival shall be, and otherwise, to 
the Collector of such port or place, or some officer or other 
person there, * * * who shall be authorized by the Presi- 
dent of the United States, to register aliens ; * * * in re- 
spect to every alien who shall come to reside within the United 
States * * * the time of the registry of such alien shall be 
taken to be the time when the term of residence within the 
limtis and under the jurisdiction of the United States, shall 
have commenced, in case of an application by such alien to be 
admitted as a citizen of the United States ; and a Certificate of 
such registry shall be required in proof of the term of resi- 
dence, by the Court to whom such application shall and may 
be made." (Italics added.) 

19 Sec. 329(b), Naturalization Act of 1940 (54 Stat. 1152; 8 U. 
S. C. 729). 



—16— 

The applicant, when declaring his intention for natural- 
ization, must also swear to a recital of lawful admission 
for permanent residence in his declaration of intention. 20 

"An applicant for naturalization shall make, under 

oath * * * substantially the following averments 

* * * (11) My lawful entry for permanent 

residence in the United States was at (city or town) 

(State) under the name of 

on (month, day, and year) on the (name of vessel 
or other means of conveyance.)" (Italics ours.) 

The Nationality Act of 1940 requires that in the petition 
for naturalization the applicant also swear to a recital 
of lawful admission for permanent residence as follows : 21 

"An applicant for naturalization shall * * * 
make and file in the Office of the Clerk of a 
Naturalization Court * * * a sworn petition 
in writing, signed by the applicant * * * which 
petition shall contain substantially the following aver- 
ments by such applicant — (11) My lawful entry for 
permanent residence in the United States was at 
(City or town) (state) under the name of ... . 
. on (month, day, and year) on the (name 
of vessel or other means of conveyance) as shown 
by the Certificate of my arrival attached to this peti- 
tion'' (Italics ours.) 



20 Sec. 331(a) (11), Naturalization Act of 1940 (54 Stat. 1153- 
54; 8 U. S. C. 731). 

21 Sec. 332(a)(ll), Naturalization Act of 1940 (54 Stat. 1154- 
56; 8 U. S. C. 732). 



—17— 

Under regulations promulgated under the authority of 
the Attorney General, it is provided that an alien :" 

"* * * in order to be eligible for naturalization 
upon a petition for naturalization to a Naturaliza- 
tion Court shall, unless specifically exempted as set 
forth in sub-chapter D of this title: (b) have been 
lawfully admitted to the United States for permanent 
residence." (Italics ours.) 

Statement of the Case. 

Appellee filed his petition to become a citizen of the 
United States as the husband of a United States citizen, 
before the Clerk of the United States District Court on 
September 4, 1945 [R. 2-7]. As the husband of a citizen 
he was exempt from the requirement of declaring his 
intention. 

There was also filed with the petition for naturalization 
a "Certificate of Arrival" attesting that appellee had been 
lawfully admitted to the United States as the son of a 
merchant under section 3 (6) of the Immigration Act 
of 1924. 24 

On March 4, 1947, there was filed with the District 
Court a list of petitions recommended to be denied, in- 



22 Sec. 322.1, Title 8, C. F. R.. issued under authority of Sec. 327 
of the Naturalization Act of 1940 (54 Stat. 1150; 8 V. S. C. 727). 

23 Sec. 310(b), Nationality Act of 1940 (54 Stat. 1145; 8 U. S. 
C. 710(b)). 

24 (43 Stat. 154; 8 U. S. C. 203). 



—18— 

eluding, under item 8, the name of appellee [R. 13-14]. 
The petition of appellee was heard in open court on March 
4, 1947, and the recommendation of denial was disap- 
proved by the Judge, who granted appellee's petition 
and admitted him to citizenship of the United States 
[R. 13-15]. Thereafter, on February 17, 1947, the Judge 
prepared a written decision in the case [R. 10-13]. 25 
Notice of appeal was filed with the Court on June 3, 
1947 [R. 16]. 

Summary of the Facts. 

Appellee is a native and citizen of China, born July 
7, 1914 [R. 2]. Appellee's father, Wong Yung San, 
was lawfully admitted to the United States in the year 
1922, under the status of a Chinese merchant pursuant 
to Article II of the Treaty of 1880 between the United 
States and China [R. 10]. On November 24, 1934, 
appellee was lawfully admitted to the United States under 
the status of "son of a merchant under section 3 (6) 
of the Immigration Act of 1924." 26 [R. 9]. Ap- 



25 See Petition of Wong Choon Hoi, 71 Fed. Supp. 160. See, 
also, C. C. A., 9th Circuit Docket No. 11551. Bonham etc. v. Chi 
Van Cham Louie in which the facts differ in so far as material 
from the case at bar only in the circumstance that appellee therein 
was admitted to the United States prior to the amendment to Sec. 
3(6) of the 1924 Act by the Act of July 6, 1932 (footnote 8, 
supra) whereas the present appellee was admitted after the said 
amendment, both appellees having entered this country after the 
effective date of the 1924 Act. 

26 Sec. 3(6), Act of 1924 (43 Stat. 154 as amended; 8 U. S. C. 
203). 



—19— 

pellee and his father have continuously resided in the 
United States since their respective entries, and both 
follow the business profession of merchant [R. 2, 10 J. 
On October 5, 1941, appellee married a native of China 
who derived citizenship by reason of her father's United 
States citizenship at the time of her birth. She took up 
permanent residence in the United States on September 
20, 1935 [R. 3]. 

Specification of Errors. 

The District Court erred in holding and deciding that 
petitioner was admitted to the United States for permanent 
residence under the Treaty of Commerce and Navigation 
with China in 1880 27 for naturalization purposes. 

The District Court erred in holding and deciding that 
petitioner's admission to the United States constituted 
lawful permanent residence for naturalization purposes. 

The District Court erred in failing to hold and decide 
that petitioner was admitted to the United States tem- 
porarily as a non-immigrant alien under Section 3 (6) 
of the Act of May 26, 1924/ 



28 



The District Court erred in admitting petitioner to 
citizenship. 



27 (22 Stat. L. 826.) 

28 (45 Stat. 154 as amended; 8 U. S. C. 203.) 



—20— 
ARGUMENT. 

The Appellee Does Not Meet the Lawful Permanent 
Residence Requirement Which Is a Condition 
Precedent to Naturalization. 

The facts are not in dispute and the sole issue is 
whether appellee's admission under the immigration and 
naturalization laws constitutes a "lawful entry for per- 
manent residence" 2 * (italics ours) within the meaning of 
the Nationality Act of 1940. No question is raised as 
to whether appellee has resided continuously in the United 
States for the required period of three years "immediately 
preceding the date of riling * * * petition" for 
naturalization. 30 Lawful admission for permanent resi- 
dence within the contemplation of the Nationality Laws 
does not include an entry which depends for its permanency 
and continued legal existence upon the maintenance of a 
particular status, as for example, an alien admitted under 
the immigration status of a recognized "accredited official 



29 Secs. 328(a), 329(a) (b), 331, allegation (11), 332(a), allega- 
tion (11) and subdivisions (b) and (c), Nationality Act of 1940 
(54 Stat. 1151-1152; 8 U. S. C. 728(a), (54 Stat. 1152; 8 U. S. 
C. 729(a) (b)), (54 Stat. 1153-1154; 8 U. S. C. 731, averment 
(11)), (54 Stat. 1154-1156; 8 U. S. C. 732(a), averment (11) 
(b)(c) ; Sec. 322.1, Title 8, C. F. R., provides that an alien "* * * 
in order to be eligible for naturalization upon a petition for natu- 
ralization to a naturalization court shall * * *: (b) have been 
lawfully admitted to the United States for permanent reside nee." 
(Italics added.) 

30 Secs. 309(a) and 310(a) of the Nationality Act of 1940 (54 
Stat. 1143; 8 U. S. C. 709; 54 Stat. 1144; 8 U. S. C. 710). These 
two sections refer to the continuity of residence to be maintained 
(under the general law for five years) immediately preceding the 
filing of the petition for naturalization. Being married to a United 
States citizen after 1934, appellee was required to establish but 
three years' residence and was exempt from the filing of the declara- 
tion of intention. 



—21— 

of a foreign government."' 31 Like the merchant, 32 his 
admission under the law is without specific time limitation 
so long as the legal status under which admitted of 
"accredited official" or "merchant" is maintained. Ad- 
mission for lawful permanent residence as an "immigrant 
or nonquota immigrant" 33 carries no restrictions as to 
occupation, profession or limitation as to time. So long 
as an alien so admitted does not abandon his legal resident 
status thus acquired he is relieved from further obligation 
under the immigration laws. It is only the latter type of 
admission that will meet the requirements of the naturali- 
zation laws. The starting point of residence prerequisite 
to naturalisation is the entry of an alien under an im- 
migration status for "lawful permanent residence/' evi- 
dence of which is the record of registry of entry from 
which a certificate of arrival may be issued certifying 
that the admission zvas for lawful permanent residence. 
Concededly the question of whether a temporary absence 
breaks the continuity of the prescribed period of residence 
immediately preceding filing of the petition for naturaliza- 



31 Sec. 3(1), Immigration Act of 1924 (43 Stat. 154; 47 Stat. 
607; 54 Stat. 711; 8 U. S. C. 203; Sec. 7(c), Public Law 291, 
79th Congress ; Chapter 652, First Session ; approved December 29, 
1945); Sec. 15, Immigration Act of 1924 (43 Stat. 162; 8 U. S. 
C. 215); Sees. 110.27 and 110.29(a), Title 8, C. F. R. 

32 Same as note 31, except "merchant" is provided for under Sec. 
3(6) of the Immigration Act of 1924 and the limitation as to pur- 
pose referring to "merchant" is included in subdivisions (b) and 
(c) of Sec. 110.29, Title 8, C. F. R. 

33 Sec. 3, Immigration Act of 1924 (43 Stat. 154; 8 U. S. C. 
203) ; Sec. 4, same act, subdivisions (a) to (f), inclusive, (43 Stat. 
155; 44 Stat. 812; 45 Stat. 109; 46 Stat. 854; 47 Stat. 650; 8 
U. S. C. 204). See footnote 9 for specific statutory exception both 
as to time and purpose with respect to students admitted under 
Sec. 4(e) of the 1924 Act. 



—22— 

tion may be determined by the general rule used in estab- 
lishing "residence" or "domicile" except as limited by the 
Naturalization Statutes. 34 Such rule is not, however, 
applicable in determining whether the commencement of 
the residence is unrestricted and not dependent upon the 
maintenance of a particular status within the contempla- 
tion of the Nationality Laws. It is settled that such 
residence cannot result from a mere sojourn in the United 
States, no matter how protracted. 35 Citizenship was can- 
celled following a long period of residence where the 
entry upon which naturalization was founded originated 
from an entry prior to the Immigration Act of 1924 as a 
stowaway. 30 Although "residence" or "domicile" may 
legally be established for many purposes, such as for 
divorce, charity, etc., by an alien admitted under the legal 
status of a temporary visitor, it is not sufficient for 
naturalization. 37 It is equally well settled that an alien 
cannot meet the legal resident status, requisite for naturali- 
zation, although lawfully admitted without time limita- 
tion prior to the Immigration Act of 1924 on the basis 
of his having been found not subject to deportation. 38 
In discussing the legal effect of the certificate of arrival 



34 U. S. v. Silver, 55 F. (2d) 250. 

^Kaplan v. Tod, 267 U. S. 228, 45 S. Ct. 257, 69 L. Ed. 585 ; 
Zartavian v. Billings, 204 U. S. 170, 175, 27 S. Ct. 182, 184, 51 
L. Ed. 428. 



36 



U. S. v. Parisi, 24 Fed. Supp. 414. 



■''In re Weig, 30 F. (2d) 418; U. S. v. Beda, 118 F. (2d) 458; 
also as seamen, U. S. v. Krcticos, 40 F. (2d) 1020; Fanfariotis v. 
U. S., 63 F. (2d) 352; In re Jensen, 11 F. (2d) 414; In re Olson, 
18 F. (2d) 425. 

**Sadi v. U. S., 48 F. (2d) 1040; Stapf v. Corsi, 287 U. S. 129, 
53 S. Ct. 40, 77 L. Ed. 215. 



—23— 

in the latter case the court stated that "* * * proof 
of an essential fact is short. It did not show that he 
was admitted for permanent residence. That makes it 
impossible for him to prove what was necessary even be- 
fore the Act of March 2, 1929 (45 Stat. 1512) took 
effect * * *, and so we held that he could not be 
admitted to citizenship on his pending petition, since he 
could not show that he had in fact been admitted for 
permanent residence as the statute required * * * 
Proof of residence that may, perhaps, become permanent 
because this alien was not deportable * * * is cer- 
tainly not the same as proof of his lawful entry for 
permanent residence." (Italics ours.) It is clear that 
the nature of the alien's entry must be assessed in the 
light of the immigration laws. 39 Although regarded as a 
"permanent resident'' of the Virgin Islands by reason of 
regulations under the immigration laws, an alien who could 
not establish his original entry by a certificate of arrival 
from the registry of the arrival of aliens in the Virgin 
Islands was held not to be entitled to naturalization. 
The court 40 pointed out that it was not until March 31, 
1938 that the Solicitor of the Department of Labor ruled 
that both the Immigration Acts of 1917 and 1924 were 
applicable to the Virgin Islands and were enforceable by 
the Immigration and Naturalization Service. On July 1, 
1938, under the above ruling, the Immigration and 
Naturalization Service assumed responsibility for the en- 
forcement of the immigration laws in the Virgin Islands. 
Under a regulation promulgated by the Commissioner of 



™Wcrblow v. U. S., 134 F. (2d) 791. 

4 Vn re Sinmiolkjier, 71 Fed. Supp. 553 (D. C). Virgin Islands, 
1947. 



—24— 

the Immigration and Naturalization Service, upon the re- 
entry of an alien, resident of the Islands prior to July 1, 
1938, he was to be regarded as presumed to have been 
lawfully admitted for permanent residence even though no 
record of his original admission existed, and under the 
regulation was required to be recorded as a lawful resident 
alien returning from a temporary absence. The cer- 
tificates of arrival in these cases were based upon records 
created under this regulation upon a reentry after July 1, 
1938. Applying the general rule by which "residence" 
or "domicile" may be established clearly, these aliens were 
"resident" or "domiciled aliens" of the Virgin Islands and 
although they may remain there indefinitely they were 
held not to be eligible for naturalization because the 
starting point of their residence for naturalization pur- 
poses could not in fact be evidenced by a certificate of 
arrival made up from a registry showing their original 
admission to have been for lawful permanent residence 
within the meaning of the Nationality Act of 1940. 41 

The requirement that only a certification from the 
registry of entires of aliens certifying to the admission 
of the alien for lawful permanent residence will be a 
proper foundation for a petition for naturalization is a 
basic longstanding principle of the naturalization laws 
of this country. 42 

It clearly appears that the lower court in the instant 
case when stating that "the term 'residence/ as used in 
the naturalization statute, is practically synonymous with 
'domicile'," confused that principle with the test used in 



"Sees. 328(a) and 329(a), Nationality Act of 1940, footnote 22. 
42 See footnote 18 for historical background. 



—25— 

determining whether or not there had been a break in 
the continuity of the statutory period of three years resi- 
dence which must elapse immediately prior to the filing 
of petition for naturalization [R. 12]. That fact is 
further shown by the decisions cited as authority for 
the court's conclusion, all of which relate to the question 
of whether there has been a break in the continuity of the 
residential period, with one exception. 43 These cases do 
not deal with the question of whether the starting point of 
residence prerequisite to naturalization was evidenced by 
a certificate of arrival certifying that the registry showed 
a lawful admission for permanent residence. The cer- 
tificate of arrival in the present case does not certify that 
appellee was admitted for lawful permanent residence, but 
rather it certifies only that according to the registry of 
his entry appellee was "lawfully admitted to the United 
States of America as the son of a merchant under Section 
3 (6) of the Immigration Act of 1924" [R. 9]. (Italics 
ours). The lower court further states that 'long before 
the Nationality Act of 1940, Chinese merchants admitted 
to engage in business here pursuant to the Treaty of 
1880 were referred to as 'domiciled' in this country" 
[R. 12]. None of the cases cited by the court, however, 
involve a determination of whether "domicile" as there 
construed would meet the requirement of the Nationality 
Laws that the entry be evidenced by a certificate certifying 
to the lawful admission of the alien for permanent residence 
as a condition precedent to jurisdiction to grant citizenship. 
All of the cases cited by the court as indicating that mer- 
chants were regarded as "domiciled" in this country 



**£/. S. v. Parisi 24 Fed. Supp. 414, 419. 



—26— 

came before the courts in writs of habeas corpus suits to 
determine whether the Immigration Service in deciding 
the excludability or deportability of each alien had ob- 
served the rules of due process in the administrative 
proceeding. In none of these cases was the question of 
construction of the terms "domicile" or "residence" in 
relation to the naturalization statutes before the court. 
The mere fact that the court found their residence not 
subject to any time limitation or that they were not 
deportable falls far short of holding that the starting 
point of their residence met the prerequisite of an entry 
of an alien upon which a certification from the registry 
of the record of arrival could be made that they were 
admitted for lawful permanent residence within the mean- 
ing of the naturalization laws. Such a determination 
would be completely foreign to the legislative design. It 
would result in the sanctioning of naturalization of aliens 
admitted as "accredited officials of a foreign government" 
under Section 3 (1) of the Immigration Act of 1924; 
also aliens admitted as a functionary of an interna- 
tional organization under Section (7) of the same act, 
as amended by the Act of December 29, 1945, Public 
Law 291, 79th Congress, First Session; or an alien 
admitted as a treaty trader under Section 3 (6) of the 
same statute, because in none of these three classes does 
the law set a time limitation. The period of their resi- 
dence is unlimited provided the particular status under 
which classified by the immigration statutes is maintained. 






—27— 

Admission After the Immigration Act of 1924 of the 
Minor Son of a Chinese Merchant, Admitted 
Prior to That Act, Does Not Constitute Lawful 
Permanent Residence for Naturalization Purposes. 

The court in the instant case reasons that "precedent 
of long standing" holds that where the merchant father 
was admitted prior to 1924 and the wife and minor 
children admitted after 1924 they "are entitled to be 
admitted for permanent residence by virtue of the treaty" 
[R. 11]. The question which the Supreme Court in the 
case of Cheung Sum She'e v. Nagle* 4 had to decide was 
whether the wives and minor children of Chinese mer- 
chants admitted under the Treaty prior to 1924 were 
guaranteed the right of entry by the Treaty of 1880 or 
whether they were mandatorily excluded from the United 
States under the provisions of the Act of 1924. Article 
II of the Treaty, although silent as to the family of a 
merchant, was held by necessary implication to include 
the wives and minor children. 45 

When enacting Section 3 (6) of the 1924 Act, in its 
original form, Congress must have been aware of the con- 
struction placed on the Treaty, yet it likewise made no 
mention of the wife and children of a merchant and by 
Section 13 (c) made excludable all persons racially in- 
eligible to citizenship. The court found that the omission 
of the wives and children in Section 3 (6) of the 1924 
Act in its original form failed to show any "Congressional 
intent absolutely to exclude" the wives and minor children 
of Chinese merchants. Ry Act of July 6, 1932, the sixth 



44 268 U. S. 336, 45 S. Ct. 539, 69 L. Ed. 985. 

i5 U. S. v. Mrs. Cue Lim, 176 U. S. 459, 20 S. Ct. 415 44 L 
Ed. 544. 



—28— 

subdivision of Section 3 of the 1924 Act was amended 
to provide for the entry of the wives and unmarried minor 
children of merchants as non-immigrants. The decision 
in the Sheung Sum Slice v. Nagle case, supra, fell far 
short of holding that the wives and minor children were 
entitled to admission under a status equivalent to that of 
an "immigrant" for lawful permanent residence upon 
which a petition for naturalization could be founded. 
Insofar as the 1924 Act related to the wives and minor 
children, the court in clear and unmistakable language 
held them not to be admitted as "immigrants," but rather 
that they were classified as "non-immigrants." Reference 
is made to the following words of the court (U. S. p. 
540) : "An alien entitled to enter the United States 
'solely to carry on trade' under an existing treaty of 
commerce and navigation is not an immigrant within the 
meaning of the Act, Section 3 (6), and therefore is not 
absolutely excluded by Section 13" (Italics ours), of the 
1924 Immigration Act. Further, "In a very definite sense 
they arc specified by the Act itself as non-immigrants." 
(Italics ours.) 

The 1924 Immigration Act by express provision applied 
to all aliens entering the United States after its effective 
date on July 1, 1924, even though admissible under some 
other law. It provided that "* * * an alien, although 
admissible under the provisions of the immigration laws, 
other than this Act, shall not be admitted to the United 
States if he is excludable by any provision of this Act." 46 
Section 13(c) of the 1924 Act excluded from admission 
as "immigrants" all aliens ineligible to citizenship unless 
found to be admissible "* * * as a nonquota immigrant 



4,5 (43 Stat. 166; 8 U. S. C. 223). See footnote 6. 



—29— 

under the provisions of subdivision (b), (d), or (e) 
of Section 4, or (2) is the wife, or the unmarried child 
under 18 years of age, of an immigrant admissible under 
such subdivision (d), and is accompanying or following 
to join him, or (3) is not an immigrant as defined in 
Section 3." 47 

Being of a race ineligible to citizenship, the wives and 
minor children were excludable under the 1924 Act if 
applying for admission as "immigrants" and could only 
be admitted under the status of a "nonquota immigrant" 
under Section 4 of the 1924 Act, or as "non-immigrants" 
under Section 3 of the same Act. The Supreme Cour., 
therefore, concluded that such racially ineligible wives and 
minor children were excludable as ''immigrants," but that 
they were admissible under a derivative status as "non- 
immigrants" as provided in Section 3(6) of the 1924 Act. 

This Honorable Court in Haff v. Yung Poy* 8 did not 
decide that the minor son in that case was admitted as an 
"immigrant" within the meaning of the 1924 Act for law- 
ful permanent residence, such as would meet the require- 
ment of the Nationality Act, nor that his derivative status 
entitled him to such a classification by reason of the Treaty. 
The merchant father was not made deportable under the 
laws enacted prior to 1924 to carry out the Treaty, on the 
grounds of having failed to maintain the status of mer- 
chant under which admitted. This court pointed out the 
many harsh consequences of requiring the deportation of 
the wives and minor children, and concluded only that the 
son was not to be deported because of the abandonment 
of mercantile status by his merchant father. 



47 (43 Stat. 155; 8 U. S. C. 204). See footnote 9. 

4 *Haff v. Yung Poy, 29 F. (2d) 999. Relied upon by the lower 
Court. [R. 12.] 



—30— 

The Repeal of the Chinese Exclusion Acts Did Not 

Contemplate That Chinese in This Country 

Under a Mercantile Status Would Become 
Eligible for Naturalization. 

In repealing the Chinese Exclusion Acts and making 
Chinese racially eligible for naturalization, 49 the Congres- 
sional Committees contemplated that such legislation would 
place those few Chinese that were to be permitted entry 
on a parity with other racial groups, but not that the legis- 
lation would, in any way, change the existing immigration 
status of Chinese aliens in this country so as to enable 
greater numbers to meet the requirements for naturaliza- 
tion. In fact, the language of the Senate Committee 
clearly demonstrates the Committee understood that the 
greater number of Chinese in this country are ineligible 
to naturalize because they have not been admitted "* * * 
for lawful permanent residence, which is a condition prece- 
dent to naturalization." (Italics added.) Their under- 
standing was expressed in the following language : 50 

"The number of Chinese who will actually be made 
eligible for naturalization under this Section is neg- 
ligible. There are approximately 42,000 alien Chinese 
persons in the United States (37,242 in continental 
United States and 4,844 in Hawaii, according to the 
census figures of 1940). However, a large number 
of these Chinese have never been admitted to the 
United States for lawful permanent residence, which 
is a condition precedent to naturalization and, there- 



49 Chinese Exclusion Repeal Act of Dec. 17, 1943 (57 Stat. 600; 
Sec. 303); Natl. Act of 1940; Chap. 344, Sec. 3 (57 Stat. 601; 
8 U. S. C. 703). 

50 78th Congress, First Session ; Sen. Rep. 535, p. 6 ; House 
Rep. 732. 



—31— 

fore, many of this number zvould not be eligible for 
naturalization, not because of racial disability, but 
because they cannot meet existing statutory require- 
ments of law. The number of Chinese who will be 
made eligible in the future, in addition to those al- 
ready here, will of necessity be very small because the 
quota for China is limited to 105 per annum, as pro- 
vided for in Section 2 of this bill." (Italics added.) 

Section 2 of the Chinese Exclusion Repeal Act of 
December 17, 1943, limits the number of Chinese who are 
made admissible under the law for permanent residence 
to certain aliens classified as "non-quota immigrants," 51 
and sets the number of Chinese admissible annually as 
"immigrants" to be computed under the provisions of 
Section 11 of the 1924 Act. Under that computation the 
quota for Chinese is limited to 105 Chinese annually. 52 
The Chinese Exclusion Repeal Act also provides that a 
preference up to seventy-five per centum of this quota 
shall be given to Chinese born and resident in China. The 
remaining twenty-five per centum would be available for 
Chinese in other countries or temporarily in the United 
States who are in a position to apply for pre-examination, 53 
or other benefits of the immigration laws incident to ad- 
mission for lawful permanent residence in the United 
States as "immigrants." Under the limitation of twenty- 



51 Sec. 4(b) (d)(e) and (f) (43 Stat. 155; with amendments; 8 
U. S. C. 204), except subdivision (e) of Sec. 4 is restricted in 
period of residence by Sec. 15, Act of 1924, as more fully set out 
in footnote 9. 

52 Sec. 61.316, Title 22, C. F. R. of U. S. A., provides "the fol- 
lowing is a list of the annual immigration quotas established for the 
various quota countries of the world * * * Chinese 105." 

M Part 142, Title 8, C. F. R. 



—32— 

five per cent of the quota available to Chinese who may be 
admitted to this country from countries other than China, 
which includes Chinese already in the United States, it 
follows that only very few of the Chinese already here 
can be naturalized, and carries out the legislative design 
and understanding that "the number who will naturally be 
made eligible for naturalization is negligible." (Italics 
added.) 

The Congressional Committee indicates very clearly that 
the purpose of the Chinese Exclusion Repeal Act was not 
to open wide the doors to Chinese "immigrants." 54 

"The purpose of this section is to repeal all of the 
laws enacted between 1882 and 1913, dealing with the 
exclusion and deportation of Chinese persons. It 
should be stated at this point that no substantial gain 
accrues to the Chinese people through the repeal of 
these laws from a standpoint of permitting Chinese 
to enter the country who are at present denied that 
privilege because other provisions of laws subse- 
quently enacted effectively keep out persons of the 
Chinese race as well as persons of other races in- 
eligible to citizenship. It does, however, eliminate the 
undesirable laws specifically designating Chinese as a 
race to be excluded from admission to the United 
States." (Italics added.) 

President Roosevelt, in his message to Congress October 
11, 1943, regarding the Chinese Exclusion Repeal Act, 
stated : 55 

"By the repeal of the Chinese exclusion laws, we 
can correct a historic mistake and silence the distorted 



r>4 See footnotes 16 and 17. 

55 Sen. Rep. 535, p. 3, 78th Congress, First Session. 



Japanese propaganda. The enactment of legislation 
now pending before the Congress would put Chinese 
immigrants on a parity with those from other coun- 
tries. The Chinese quota, would, therefore, be only 
about 100 immigrants a year. There can be no rea- 
sonable apprehension that any such number of immi- 
grants will cause unemployment or provide competi- 
tion in the search for jobs. The extension of the 
privileges of citizenship to the relatively few Chinese 
residents in our country would operate as another 
meaningful display of friendship." 

The foregoing quotations from the Congressional Com- 
mittee reports are a public recognition that all the prior 
laws dealing with Chinese were laws of "exclusion" and 
not admission, designed for the purpose of preventing an 
influx of Chinese immigration into the United States, and 
that the privilege granted by Article II of the Treaty of 
1880 to special classes named therein, including merchants, 
"to go and come of their own free will and accord" was 
a special privilege granted to a preferred class for com- 
mercial purposes only. The Treaty contained no definition 
of the term "merchant," nor did it provide any particular 
procedure for his coming and going. It was not until the 
Act of November 3, 1893, enacted in pursuance of the 
Treaty, that the term "merchant" was defined. 56 That 
definition requires that he maintain his mercantile activi- 
ties in order to retain the status under that Act and the 
Treaty, of "merchant." By this definition he was required 
to engage in buying and selling merchandise, and to have 
a fixed place of business, and during the time he claimed 



r,6 See footnote 4. 



—34— 

to be so engaged was not to perform any manual labor 
except such as was necessary in the conduct of his business 
as a merchant. 

Section 2 of the same Act in defining a "domiciled mer- 
chant" signifies in clear language a Congressional intent 
that admission of a Chinese as a merchant under this law 
was not to constitute an admission for unrestricted, law- 
ful, permanent residence such as would form the founda- 
tion for a petition for naturalization. 57 It was provided 
that: 

"Where an application is made by a Chinaman for 
entering into the United States on the ground that he 
was formerly engaged in this country as a merchant, 
he shall establish by the testimony of two creditable 
witnesses, other than Chinese, the fact that he con- 
ducted such business, as hereinbefore defined, for at 
least one year before his departure from the United 
States, and that during such year he was not engaged 
in the performance of any manual labor excepting 
such as was necessary in the conduct of his business 
as such merchant, and in default of such proof shall 
be refused landing/' (Italics added.) 

A study of the history of the treaties and the legislation 
effectuating the treaty stipulations dispels any contention 
that it was ever intended or contemplated that Chinese 
were to be admitted into the United States as permanent 
settlers to become a part of the body politic of this country. 

57 (28 Stat. L. 7.) 



—35— 

At the outset, Congress prohibited the naturalization of 
any Chinese who might then be in the United States. 58 
Moreover, by Article IV of a Convention Regulating 
Chinese Immigration concluded March 17, 1894, it was 
provided that: 

''In pursuance of Article III of the Immigration 
Treaty * * * signed * * * the 17th day of 
November, 1880 * * * it is hereby understood and 
agreed that Chinese laborers or Chinese of any other 
class, either permanently or temporarily residing in 
the United States, shall have for the protection of 
their persons and property all rights that are given by 
the laws of the United States to citizens of the most 
favored nation, excepting the right to become natural- 
ized citizens. * * *" (Italics added.) 

All Chinese other than the specified exempt classes were 
excluded from admission, and if found in the United States 
were made deportable/ 9 unless such Chinese had complied 
with the law requiring registration of all Chinese laborers 
within the United States during the registration period. 60 
The character of the immigration status with which a mer- 
chant was clothed who had been admitted to the United 
States prior to the Immigration Act of 1924, is shown in 
a decision of the Supreme Court, involving the admissi- 



58 Act approved May 6, 1882, providing, "That hereafter no State 
court or court of the United States shall admit Chinese to citizen- 
ship; and all laws in conflict with this act are hereby repealed." 
(22 Stat. 61; 8 U. S. C. 363.) 

59 Sec. 13, Act of Sept. 13, 1880 (25 Stat. 476, 477); Sec. 2, 
Act of May 5, 1892 (27 Stat. 25); Sec. 3, Act of Mar. 3, 1901 
(31 Stat. 1093). 

60 Act of May 5, 1892, as amended by the Act of Nov. 3, 1893 
(28 Stat. 7). 



—36— 

bility of the wife and minor children upon their arrival 
at a port in the United States in 1917. The mercantile 
status under which the husband-father was admitted to 
the United States in 1901 had terminated and he was 
found to be a laundryman at the time of their application. 
The court concluded that the husband-father although him- 
self admitted under a mercantile status, no longer had an 
immigration status entitling his wife and minor children 
to admission to the United States. 61 Although a Chinese 
admitted as a merchant prior to 1924 was held not to be 
subject to deportation because of subsequent abandonment 
of status, if he left the United States temporarily it was 
necessary for him to establish a mercantile status each time 
he reentered the United States. He was not, however, 
limited in the establishing of such mercantile status to 
presentation of a section six certificate issued by his own 
government attesting to his mercantile status in the same 
manner as on original entry. 62 

From the foregoing judicial interpretations and refer- 
ence to the history of the treaties and legislation preceding 
the enactment of the 1924 Immigration Act, it is readily 
understandable that the Supreme Court would hold that 
the admission of the wives and minor children after the 
1924 Act, under the existing status of a Chinese admitted 
as a merchant prior to the said Act, was not as "immi- 



61 Yee Won v. White, 256 U. S. 399. 41 S. Ct. 504. 65 L. Ed. 
1012; Chung Yim v. U. S. s 78 F. (2d) 43. 

e2 Lau Ow Bew v. U. S., 144 U. S. 47, 12 S. Ct. 517, 36 L. Ed, 
340; U. S. v. Wong You, 223 U. S. 67, 32 S. Ct. 195, 56 L. Ed. 
354. Mr. Justice Holmes, in referring to the Exclusion Acts, 
states : "The existence of the earlier laws only indicates the 
special solicitude of the government to limit the entrance of 
Chinese." 



—37— 

grants" or "nonquota immigrants" as those terms are used 
in the 1924 Act which terms define the only classes of 
aliens admitted for lawful unrestricted permanent resi- 
dence, but rather found their admissions to be authorized 
as "non-immigrants," the term used in the 1924 Act to 
cover all classes of aliens whose admissions are for a 
period of time to be determined upon a continuous mainte- 
nance of status or a period specified at time of admission, 
but not for lawful unrestricted permanent residence as to 
time or purpose. 

All aliens, including Chinese who did not have an un- 
restricted permanent immigration status, and who entered 
the United States prior to the 1924 Act and who were 
not deportable under that Act, may have their entries or 
residence legalized, and a registry made of their entries 
when so created meets the requirement of the Nationality 
Act of 1940. A certification from such a registry of the 
alien's entry showing admission for lawful permanent 
residence meets that essential prerequisite to a grant of 
citizenship. The Nationality Act provides : 63 

"(c) For the purpose of the immigration laws and 
the naturalization laws an alien, in respect of whom a 
record of registry has been made as authorized by 
this section, shall be deemed to have been lawfully 
admitted to the United States for permanent residence 
as of the date of such alien's entry." (Italics added.) 



63 Secs. 328 (b) and (c), Nationality Act of 1940 (54 Stat. 1151- 
1152; 8 U. S. C. 728). 



—38^- 

Conclusion. 

The order naturalizing the appellee was erroneously 
granted. Since appellee failed to establish his admission 
for lawful permanent residence as required by the Natu- 
ralization laws, he was not eligible for citizenship. 

It is respectfully submitted, therefore, that the judgment 
and order of the District Court, admitting him to citizen- 
ship, should be reversed. 

Respectfully submitted, 

James M. Carter, 

United States Attorney; 

Ronald Walker, 

Assistant United States 
Attorney, 

Attorneys for Appellant. 

Bruce G. Barber, 

Chief, District Adjudications Division 
Immigration and Naturalization Service, 
on the Brief. 



No. 11668 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



William A. Carmichael, District Director, Immigration 
and Naturalization Service, United States Department 
of Justice, District No. 16, 

Appellant, 



vs. 
Wong Choon Hoi, 



Appellee. 



BRIEF FOR APPELLEE. 

FILL 

OCT 

PAUL P. O'BRIEN, 

Benjamin W. Henderson, oLerk 

1144 Subway Terminal Building, Los Angeles 13, 

Attorney for Appellee. 



The Myers Legal Press, Los Angeles. Phone VAndike 9007. 



TOPICAL INDEX 

PAGE 

Statement of the case 1 

Summary of the facts 2 

Question raised on appeal 2 

Argument 3 

The admission of the minor child of a resident Chinese mer- 
chant under terms of the Treaty of 1880 is an admission 
for permanent residence 7 

The cases cited by appellant are not in point 10 

The appellant takes an inconsistent view 13 

Admission of the minor son of a Chinese merchant after July 
1, 1924, is on exactly the same basis as a similar admission 
prior to that date 13 

Congress granted the privilege of naturalization to all Chinese 
aliens lawfully admitted to the United States for permanent 
residence 14 

Conclusion 15 



TABLE OF AUTHORITIES CITED 

Cases page 

Cheung Sum Shee v. Nagle, 268 U. S. 336 5, 6, 7, 13, 14 

Chew Heong v. United States, 112 U. S. 536 4 

Fanfariotis v. United States, 63 F. (2d) 352 12 

Haff v. Yung Poy, 68 F. (2d) 203 7, 10, 13, 14 

Jensen, In re, 11 F. (2d) 414 12 

Kaplan v. Tod, 267 U. S. 226, 45 S. Ct. 257, 69 L. Ed. 585 11 

Olsen, In re, 18 F. (2d) 425 12 

Sadi v. United States, 48 F. (2d) 1040 12 

Stapf v. Corsi, 287 U. S. 129, 53 S. Ct. 40, 77 L. Ed. 215 12 

United States v. Beda, 118 F. (2d) 458 11 

United States v. Kreticos, 40 F. (2d) 1020 12 

United States v. Mrs. Gue Lim, 176 U. S. 459 4, 7 

United States v. Parisi, 24 Fed. Supp. 414 11 

Weig, In re, 30 F. (2d) 418 11 

Zartavian v. Billings, 204 U. S. 170, 27 S. Ct. 182, 51 L. Ed. 428 11 

Statutes 

Immigration Act of June 2, 1924 (8 U. S. C, Sec. 224) 3 

Immigration Act of 1924, Sec. 3 6 

Immigration Act of 1924, Sec. 5 6 

Immigratio Act of 1925, Sec. 13(c) 6 

Immigration and Naturalization Service (54 Stat. 1156; 8 U. S. 

C, Sec. 732) 1 

Treaty Between the United States and China (Nov. 17, 1880) 

(22 Stat. 826) 3 

Treaty Between the United States and China (1880), Art. II.. ..2, 3 

Textbooks 

United States Department of Justice, Immigration and Naturali- 
zation Service, Monthly Review, Vol. I, No. 7, April 1944, 
p. 6, article by Hon. Edward J. Shaughnessy 14 



No. 11668 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



William A. Carmichael, District Director, Immigration 
and Naturalization Service, United States Department 
of Justice, District No. 16, 

Appellant, 



vs. 
Wong Choon Hoi, 



Appellee. 



BRIEF FOR APPELLEE. 



Statement of the Case. 

Appellee filed his petition to become a citizen in the 
District Court of the United States for the Southern 
District of California, Central Division, on September 
4, 1945. [R. 2-7.] Said petition was filed in the form 
and manner provided by law [R. 2-8] and attached there- 
to was the Certificate of Arrival provided by the Com- 
missioner of Immigration and Naturalization stating the 
date, place and manner of petitioner's arrival in the United 
States. (54 Stat. 1156; 8 U. S. C. 732.) [R. 9.] The 
Immigration and Naturalization Service filed with the 
said court a recommendation that the petition be denied 
for the reasons: "(1) There was not filed with the peti- 



— 2— 

tion a valid certificate showing the date, place and manner 
of the petitioner's arrival in the United States, and (2) 
the petitioner has failed to establish continuous legal resi- 
dence in the United States for the period required by 
law." [R. 14.] The petition was heard in open court on 
March 4, 1947, and was granted over the objection as en- 
tered. The Judge prepared and filed a written decision in 
the case. [R. 10-13.] The petitioner subscribed to and 
took the oath of allegiance to the United States of Ameri- 
ca. [R. 8.] 

Summary of the Facts. 

Wong Choon Hoi, appellee herein, a person of Chi- 
nese race, was born in China, July 7, 1914. [R. 2.] His 
father, Wong Yung Sau, was lawfully admitted to the 
United States for permanent residence in 1922 as a Chi- 
nese merchant pursuant to Article II of the Treaty of 
1880 between the United States and China. [R. 10.] 
Appellee was lawfully admitted to the United States, No- 
vember 24, 1934, as the minor son of a resident Chinese 
merchant pursuant to Article II of the said same treaty. 
Both appellee and his father have resided continuously in 
the United States since the dates of their respective en- 
tries. On October 5, 1941, appellee married a born citizen 
of the United States. He has resided with his wife and 
family at Los Angeles, California, continuously since his 
marriage and is engaged in business as a merchant. 

Question Raised on Appeal. 

There is only one question raised and to be considered 
on this appeal, namely: 

Was the appellee lawfully admitted to the United States 
for permanent residence on November 24, 1934? 



— 3— 

Argument. 

Was the appellee lawfully admitted to the United States, 
November 24, 1.934, for permanent residence? The trial 
court so held and if, on appeal, this question can again be 
answered in the affirmative the judgment of the lower 
court must be sustained. 

It must first be noted that the appellee is a person of 
the Chinese race and until the repeal of the so-called Chi- 
nese Exclusion Acts on December 17, 1943, was racially 
ineligible to citizenship in the United States and was even 
excluded from entering the United States except under 
provisions of certain treaties existing between the United 
States and China. 

Immigration of Chinese persons to the United States 
including the appellee herein was controlled by the Treaty 
of November 17, 1880 (22 Stat. 826), and not by the 
Immigration Act of June 2, 1924 (8 U. S. C. 224). Arti- 
cle II of the said treaty provides: 

"Chinese subjects, whether proceeding to the 
United States as teachers, students, merchants or 
from curiosity, together with their body and house- 
hold servants . . . shall be allowed to go and 
come of their own free will and accord and shall be 
accorded all the rights, privileges, immunities and 
exemptions which are accorded to the citizens and 
subjects of the most favored nations/' 

The Government admits that the father, Wong Yung 
Sau, was admitted for permanent residence under this 
provision of the treaty on December 10, 1922, but con- 
tends that in some way the Immigration Act of 1924 abro- 
gated the treaty and that the son was admitted under 
terms of the Act. 



— 4— 

We contend that the treaty between the United States 
and China above referred to, was not modified or abro- 
gated by any of the various acts of Congress, either ex- 
pressly or by implication, until the Act of December 17, 
1943, which repealed the Chinese Exclusion Act and 
made Chinese of a race eligible for United States citizen- 
ship, and that appellee was lawfully admitted to the United 
States for permanent residence November 24, 1934, under 
terms of the said treaty of 1880 between the United 
States and China. 

The basic question has been settled by the Courts in a 
series of cases which we now discuss: 

In U. S. v. Mrs. Guc Lim (176 U. S. 459) it was con- 
tended by the Government that the Congressional Act of 
1884, relating to the necessity of Chinese persons obtain- 
ing certain certificates of identity, abrogated the terms of 
the Treaty of 1880 with reference to Chinese merchants, 
in that the certificate required by the terms of the Act 
could not be obtained by the wife and minor children of 
the merchant and consequently they could not enter the 
United States. The Court in considering the question 
quoted with approval the words of Mr. Justice Harlan 
delievered in Chew Heong v. U. S., 112 U. S. 536, as 
follows : 

"The Court should be slow to assume that Con- 
gress intended to violate the stipulation of a treaty 
so recently made with a government of another coun- 
try. * * * Aside from the duty imposed by the Con- 
stitution to respect treaty stipulations when they be- 
come the subject of judicial proceedings, the Court 
cannot be unmindful of the fact that the honor of 
the Government and the people of the United States 
is involved in every inquiry whether rights secured 



— 5— 

by such stipulations shall be recognized and pro- 
tected. And, it would be wanting in proper respect 
for the intelligence and patriotism of a coordinate 
department of the Government were it to doubt, for 
a moment, that these considerations were present in 
the minds of its members when the legislation in 
question was enacted." 

At page 465, the opinion goes on to say: 

"We ought, therefore, to so consider the Act, if it 
can reasonably be done, as to further the execution 
and not to violate the provisions of the Treaty." 

The Court held that the Act of Congress did not abro- 
gate the treaty but must be interpreted as carrying the 
terms of the treaty into effect. 

The question as to the status of Chinese merchants, 
their wives and minor children who are admitted to the 
United States under terms of the Treaty of 1880 and the 
effect of the Immigration Act of 1924 was considered by 
the Supreme Court of the United States in Cheung Sum 
Slice v. Nagle, 268 U. S. 336, wherein the Act of 1924 
was construed so as to preserve the treaty rights of 1880. 
In this case the question was whether or not the wife 
and minor children of a resident Chinese merchant were 
still admissible to the United States under the terms of 
the Treaty of 1880 or whether these rights had been lost 
with the passage of the Immigration Act of 1924. In 
other words, did the Immigration Act of 1924 abrogate 
the Treaty of 1880? The Court held that it did not. 
At page 345 the opinion states : 

'The wives and minor children of resident Chi- 
nese merchants were guaranteed the right of entry 
by the Treaty of 1880 and certainly possessed it prior 
to July 1, 1924, when the present Immigration Act 



became effective. (U. S. v. Mrs. Gue Lim, 176 U. S. 
459.) That Act must be construed with the view to 
preserve Treaty rights unless clearly annulled, and we 
cannot conclude that, considering its history, the gen- 
eral terms therein disclose a congressional intent ab- 
solutely to exclude the petitioner from entry. 

"In a certain sense it is true that petitioners did 
not come 'solely to carry on trade/ But Mrs. Gue 
Lim did not come as a 'merchant/ She was never- 
theless allowed to enter, upon the theory that a treaty 
provision admitting merchants by necessary implica- 
tion extended to their wives and minor children. The 
rule was not unknown to Congress when considering 
the Act now before us, nor do we think the language 
of Sec. 5 is sufficient to defeat the rights which pe- 
titioner has under the treaty. In a very definite 
sense, they are specified by the Act itself as 'non- 
immigrant.' They are aliens entitled to enter in pur- 
suance of a treaty as interpreted and applied by the 
Court 25 years ago/' 

The foregoing decision is applied to consideration of 
Sec. 5 of the Immigration Act of 1924. The Government 
in the instant case contends that appellee was admitted 
under Sec. 3 of the same Act. It must be noted that Sec. 
13(c) of the same Act specifically prohibits the admission 
of appellee as an "alien ineligible to citizenship" and the 
only law available to him at the time of his entry was the 
Treaty of 1880. The reasoning advanced by the Supreme 
Court in Cheung Sum Shee v. Nagle (268 U. S. 336), 
applies equally to Sec. 3 of the Immigration Act of 1924. 
The Act did not modify or abrogate the treaty in any re- 
spect and the appellee was lawfully admitted under the 
terms of said treaty for permanent residence in the 
United States. 



— 7— 

The Admission of the Minor Child of a Resident 
Chinese Merchant Under Terms of the Treaty 
of 1880 Is an Admission for Permanent Residence. 

This question is well reasoned and decided in Haff v. 
Yung Po\\ 68 F. (2d) 203. (C. C. A., 9th Cir., 1933.) 
In that case the appellee was a native born Chinese boy 
legally admitted to the United States as the minor son of 
a resident Chinese merchant on June 2, 1926, at the age 
of nine (9). His father was, at the time of admission, 
lawfully domiciled in the United States and engaged as a 
merchant at San Jose, California. In 1927 the father 
ceased to be a merchant and obtained employment as a 
janitor, and the mercantile institution with which the 
father had been associated went out of business. Depor- 
tation proceedings were instituted against the minor son 
contending, (1) that the appellee's rights to remain per- 
manently in the United States were measured by the Im- 
migration Act of 1924 and not by the Treaty of Novem- 
ber 17, 1880, and, (2) that one admitted to the United 
States under the Immigration Act of 1924 as the minor 
son of a trader became subject to deportation if the father 
ceased to carry on trade. 

The Court held that the Act of 1924 did not abrogate 
the Treaty of 1880, for the reason that "no provision of 
the Act is in direct conflict with the treaty rights of such 
merchants." 

After reviewing the decisions, including the ones herein 
above discussed (Cheung Sum Shee v. Naglc, 268 U. S. 
336, 45 S. Ct. 539, and U. S. v. Mrs. Cue Lim, 176 U. S. 
459, 20 S. Ct. 415), the Court states (page 204) : 

"In view of these decisions, we are of the opinion 
that appellee's right to remain in the United States 



— 8— 

is measured by the Treaty and not by the Immigra- 
tion Act of 1924, even though he came here after the 
passage of that Act." 

The Court then passed to the question: "Did the change 
in the father's status require that the son be deported?" 
If the son was subject to the Act of 1924 and admitted 
thereunder on a temporary or terminable basis, he must 
now be deported. If admitted pursuant to the Treaty of 
1880 the admission was for permannt residence and the 
boy was not deportable. The real question then for con- 
sideration must be worded thus: "Was the entry of the 
minor son, as the son of a Chinese merchant, on June 2, 
1926, after the effective date of the Immigration Act of 
1924, a lawful entry for permanent residence?" The Court 
held that the minor son's right to remain in the United 
States was governed by the Treaty of 1880 and not by 
the Act of 1924 and that no limitation or restriction upon 
the alien's stay in the United States is contained in the 
Treaty. At pages 204-205 the Court says: 

"In support of its claimed right to deport appellee 
because he has lost his communicated status as the 
son of a merchant, the Government relies upon Sec- 
tion 15 of the Act of 1924 (8 U. S. C. A. 215) and 
the departmental rules promulgated thereon. Said 
Section 15 provides, in part, that, upon failure to 
maintain the status under which admitted, the alien 
will depart. But, as we have seen, appellee's right to 
remain in the United States is governed by the treaty 
and not by the act, and no limitation or restriction 
upon the alien's stay in the United States is contained 
in the treaty. On the contrary, it is well settled that 
a Chinese merchant, lawfully admitted prior to the 
Act of 1924, may remain here after he has lost his 



status as a merchant (See Lo Hop v. U. S. (C .C. A. 
6), 257 F. 489, and Wong Sun Fay v. U. S. (C. C. 
A. 9), 13 F. (2d) 67) ; and the government therefore 
concedes that appellee's father is not now deportable. 
The right of such a merchant's wife or minor child 
to remain here after loss of his or her communicated 
status, by reason of the merchant's changed occupa- 
tion, is, of course, another question; but that such an 
alien's right is co-extensive with the right of the hus- 
band, or father, seems a just and reasonable answer, 
for the absurdities and hardships of a contrary rule 
of law are apparent. Thus, if a merchant, because 
of illness, mishap, economic condition, or other mis- 
fortune, were required to change his status as a mer- 
chant and secure other employment, should his hap- 
less — and perhaps helpless — family be deported and 
he allowed to remain, or perforce required to remain 
because of long absence from his native country and 
environment? Likewise must the family of such a 
merchant be deported because, upon the death of the 
merchant, the communicated status of the wife and 
children has been lost? 

With these harsh consequences in mind, and in 
view of the well-settled rule of law 'that statutes 
should receive a sensible construction, such as will 
effectuate the legislative intention, and, if possible, 
so as to avoid an unjust or an absurd conclusion.' 
(Lau Ow Bew v. U. S., 144 U. S. 47, 59, 12 S. Ct. 
517, 520, 36 L. Ed. 340), we cannot conclude that 
the rights of such aliens to remain here should be 
construed so narrowly as the government contends, 
or that it was the intention of Congress in enacting 
the Immigration Act of 1924 that aliens admitted to 
the United States by virtue of the 'merchant status' 
of their prior domiciled father or husband, as the 



—10— 

case might be, should be deported because the mer- 
chant, although not subject to deportation, has lost 
his status as a merchant. " 

The Haff v. Yung Poy (supra) case is exactly in point 
with the case here under consideration. The father in 
each case was admitted as a treaty trade merchant prior 
to the Immigration Act of 1924 and the minor son in each 
case was admitted as the minor son of the respective mer- 
chant after the effective date of the Act of 1924. The 
Court held that Yung Poy legally entered the United 
States for permanent residence pursuant to the Treaty 
of 1880 and was not subject to deportation. By the same 
reasoning Wong Choon Hoi, appellee herein, legally en- 
tered the United States for permanent residence pursuant 
to the Treaty of 1880 and is eligible to naturalization on 
such record. 

The Cases Cited by Appellant Are Not in Point. 

Appellant argues the effect of a qualified admission to 
the United States under provisions of the Act of July 1, 
1924, and we have no quarrel with the conclusions reached 
and the cases cited. He does, however, entirely disregard 
the fact that the appellee herein was admitted pursuant to 
the Treaty of 1880, and that his admission carried "no 
restrictions as to occupation, profession or limitation of 
time 1 ' [R. 21]. 

The cases cited by appellant wherein the question of 
entry into the United States is discussed are not in point. 
Not a single one of these cases involves an admission pur- 
suant to the Treaty of 1880 and consequently are not help- 
ful in considering the instant question. 



—11— 

In Kaplan v. Tod (267 U. S. 226, 45 S. Ct. 257, 69 L. 

Ed. 585 ), the subject was of feeble mind and was detained 
at Ellis Island when she applied for admission. She was 
later paroled to an institution and, by the institution, per- 
mitted to reside in the City of New York with her father. 
The Court held the subject had never legally entered the 
United States for residence even though for some period 
of time she had been physically in the United States. 

In Zartavian r. Billings, 204 U. S. 170, 27 S. Ct. 182, 
51 L. Ed. 428, the minor daughter of a naturalized citizen 
was denied admittance to the United States. She claimed 
to be a citizen of the United States through the natural- 
ization of her father and the further fact that she was 
actually in the United States as a minor. The Court held 
that having been debarred from entry she was never law- 
fully in the United States. 

In U. S. v. Parisi, 24 Fed. Supp. 414, the subject en- 
tered as a stowaway and attempted to use such entry as 
a basis for legal residence in the United States. The Court 
rightly held that he had no basis for legal residence. 

In In re Wcig, 30 F. (2d) 418, the subject entered as a 
visitor on a six month permit. The Court held this not 
to be a lawful entry for permanent residence. 

In U. S. v. Beda, 118 F. (2d) 458, the subject obtained 
his naturalization, alleging five years' continuance resi- 
dence in the United States immediately preceding the fil- 
ing of his petition. In a cancellation action the Court 
found that he had actually been away from the United 
States more than two years out of the five and had re- 
turned to the United States as a non-immigrant on a 
temporary visit, 



—12— 

In U. S. v. Kreiicos, 40 F. (2d) 1020, the subject ar- 
rived as a deserting seaman and manifestly was not ad- 
mitted for permanent residence. 

In Fanfariotis v: U. S., 63 F. (2d) 352, the subject 
entered as a seaman and the Court rightly held that he was 
not admitted for permanent residence. 

In In re Jensen, 11 F. (2d) 414, the subject also en- 
tered as a deserting seaman and of course was not law- 
fully admitted for permanent residence. 

In In re Olscn, 18 F. (2d) 425, the subject obtained a 
declaration of intention while on a trip to the United 
States and then entered and paid head tax at a later date. 
The Court held the declaration to be invalid since it was 
obtained before he had any status as a resident in the 
United States. 

In Sadi v. U. S., 48 F. (2d) 1040, the subject entered 
as a student for a period of two years. Of course, he 
was not admitted for permanent residence. 

In Staff v. Corsi, 287 U. S. 129, 53 S. Ct. 40, 77 L. 
Ed. 215, the subject entered as a deserting seaman in 
1923 and was thereafter permitted to return to the United 
States after a visit abroad upon his representation that 
he was a previously lawfully admitted immigrant. The 
Court rightly held that he had not been lawfully admitted 
for permanent residence in 1923. 

It will be noted that all of the cited cases simply hold 
that an alien must be admitted for permanent residence 
as a condition precedent to applying for naturalization. 
We thoroughly agree with that statement of the law and 
we submit that the appellee herein was lawfully admitted 
for permanent residence on November 24, 1934. 



—13— 

The Appellant Takes an Inconsistent View. 

The question of the status of Chinese persons admitted 
to the United States as minor sons of merchants prior to 
July 1, 1924, has been considered by the government in 
many cases, where, since the repeal of the Chinese Ex- 
clusion Act, these persons have applied for admission to 
citizenship with a Certificate of Arrival based upon said 
entry. In these cases the Immigration and Naturalization 
Service has ruled that where the subject arrived prior to 
July 1, 1924, the entry is for lawful, permanent residence 
and is sufficient in law for naturalization purposes. 

Where is the authority in law to take a different view 
concerning an identical entry after July 1, 1924, and be- 
fore December 17, 1943? All such Chinese persons have 
been admitted under authority of the same law ; the Treaty 
of 1880, and all are lawfully admitted for permanent 
residence. 

Admission of the Minor Son of a Chinese Merchant 
After July 1, 1924 Is on Exactly the Same Basis 
as a Similar Admission Prior to That Date. 

We have heretofore pointed out that there is no differ- 
ence in law as to the resident status of the minor son of 
a Chinese merchant admitted at any time prior to Decem- 
ber 17, 1943. We have also shown that the Immigration 
and Naturalization Service admits that the said sons ad- 
mitted prior to July 1, 1924, are lawfully in the United 
States for permanent residence and eligible to be natural- 
ized upon the basis of such entry record. 

In an attempt to distinguish the case of Cheung Sum 
Slice v. Nagle [supra) and Haff v. Yung Po\ (supra), 
Appellant fails to recognize that at the time said cases 



—14— 

were considered and, in fact, until December 17, 1943, 
persons of the Chinese race were not eligible to be natur- 
alized. Naturally neither case touches upon the subject of 
residence for naturalization purposes. The Shoe case is 
authority for the proposition that the Immigration Act of 
1924 did not modify, abrogate, or in any respect affect 
the Treaty of 1880. The Haff v. Yung Poy case is au- 
thority for the proposition that the admission of a Chinese 
to the United States as the minor son of a resident Chinese 
merchant is an admission pursuant to the Treaty of 1880, 
and although admitted after July 1, 1924, the admission 
is for permanent residence. 

Congress Granted the Privilege of Naturalization to 
All Chinese Aliens Lawfully Admitted to the 
United States for Permanent Residence. 

Appellant argues that Congress in repealing the Chi- 
nese Exclusion Act and making persons of Chinese race 
eligible to naturalization did not contemplate that those 
admitted as the sons of merchants prior to December 17, 
1943, would become citizens. The Senate Committee re- 
ports are cited as evidence wherein it is stated that a large 
number of the then 37,242 alien Chinese in continental 
United States have never been admitted for lawful per- 
manent residence, and therefore many of this number 
would not be eligible for naturalization. Undoubtedly the 
statement and the conclusion are both true, and while 
we find no statistics showing the exact number of persons 
in the 37,242 who were admitted as sons of merchants, 
acquaintance with any group of resident Chinese indicates 
that the percentage is relatively small. Furthermore, the 
Hon. Edward J. Shaughnessy, in his article published in 
the U S. Department of Justice, Immigration and Nat- 
uralization Service, Monthly Review, Vol. I, No. 7, April 



—15— 

1944, gives the real reason for the small number of alien 
Chinese in the group who would seek naturalization, when 
at page 6, he states: 

"The Chinese is an old population group; the median 
age for non-citizen Chinese males is 50.29 — in 1940 
the median age for the male population of the United 
States as a whole was 29.1. Undoubtedly, many of 
the older Chinese will not be able to satisfy the nat- 
uralization courts' so-called 'educational requirements' 
and will, because of their age, never be able to." 

The entire alien Chinese population, as shown above, 
amounted to less than 1% of our total alien population 
at that time, and to a relatively smaller percentage when 
compared with our 130 odd millions. It is readily un- 
derstood that the Senate Committee, knowing the small 
number of Chinese in the United States and the median 
age and customs pertaining to the group would state: 
"The number of Chinese who will actually be made eligible 
for naturaliaztion under this Section is negligible." 

The Congress certainly intended to open the privilege 
of naturalization to all those who could meet the require- 
ments of the law, which appellee herein has fully done. 

Conclusion. 

The trial court properly found that appellee had been 
lawfully admitted to the United States for permanent resi- 
dence, and was therefore eligible to naturalization. The 
judgment and the order of the Court admitting him to 
citizenship should be sustained. 

Respectfully submitted, 

Benjamin W. Henderson, 

Attorney for Appellee. 



No. 11668. 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



William A. Carmichael, District Director, Immigra- 
tion and Naturalization Service, United States Depart- 
ment of Justice, District No. 16, 

Appellant, 

vs. 

Wong Choon Hoi, 

Appellee. 



APPELLANT'S REPLY BRIEF. 



James M. Carter, 

United States Attorney; 

Ronald Walker, 

Assistant United States Attorney, 

600 United States Postoffice and 
Courthouse Bldg., Los Angeles (12), 

Attorneys for Appellant. 

Bruce G. Barber, 

Chief, District Adjudications Division 
Immigration and Naturalization Service 
on the Brief. 

Parker & Company, Law Printers, Los Angeles. Phone TR. 5206. 



TOPICAL INDEX 

PAGE 

Chinese merchants classified as * 'non-immigrants" under the 1924 
Immigration Act 1 

Modification of the treaty by the amendment of July 6, 1932, to 
the Immigration Act of 1924 4 

Certain actions of the Immigration and Naturalization Service 
not of binding effect on this court 11 

Relevancy of immigration status as a basis for naturalization 12 



TABLE OF AUTHORITIES CITED 

Cases page 

Cheung Sum Shee v. Nagle, 268 U. S. 336, 45 S. Ct. 539, 69 L. 

Ed. 985 2, 3, 5, 7, 9 

Cheung Sum Shee v. Nagle, U. S. 540 2 

Chung Yim v. United States, 78 F. (2d) 43 3 

Haff v. Yung Poy, 68 F. (2d) 203 2 

Jeu Jo Wan v. Nagle, 9 F. (2d) 309 6 

Kaname Susuki v. Harris, 29 Fed. Supp. 46 6 

Pezzi, In re, 29 F. (2d) 999 9 

Shizuko Kumanomido v. Nagle, 40 F. (2d) 42 6 

Sinmiolkjier, In re, 71 Fed. Supp. 553 12 

United States v. Carusi, 72 Fed. Supp. 195 10 

United States v. Ginsberg, 243 U. S. 472, 37 S. Ct. 422, 61 L. 

Ed. 853 13 

United States v. Hughes, 9 Fed. Supp. 792 6, 8 

United States ex rel. Lam Shin Hing v. Corsi, 4 Fed. Supp. 591 7 

Wong Sun Fay v. United States, 13 F. (2d) 67 2 

Yee Won v. White, 256 U. S. 399, 41 S. Ct. 504, 65 L. Ed. 1012 4 

• 

Miscellaneous 

75 Congressional Record, p. 13840 5 

8 Canada Federal Regulations 110.38 12 

8 Canada Federal Regulations 363.7 13 

House Report 431, 72d Cong., 1st Sess 5 



Statutes page 

Act of July 6, 1932 (47 Stat. 607; 8 U. S. C. 203) 4 

Immigration Act of 1924, Sec. 3(6) 2, 8, 9 

Immigration Act of 1924, Sec. 5 8 

Immigration Act of 1924, Sec. 6 (43 Stat. 155-156; 47 Stat. 656; 

45 Stat. 1009; 8 U. S. C. 206) 14 

Immigration Act of 1924, Sec. 13 2, 8 

Immigration Act of 1924, Sec. 13(c) 8 

Immigration Act of 1924, Sec. 15 (8 U. S. C. 215) _ 7 

Immigration Act of 1924, Sec. 25 (43 Stat. 166; 8 U. S. C. 

223) 7, 8, 9 

Immigration Act of 1924, Sec. 28(g) (43 Stat. 168-169; 8 U. S. 

C. 224) 7, 8, 9 

Nationality Act of 1940, Sec. 328(b) (54 Stat. 1152; 8 U. S. 

C. 728) 13 

Nationality Act of 1940, Sec. 328(c) (54 Stat. 1152; 8 U. S. C. 

728) 13 

Treaty Between China and the United States, Art. 4 7 



No. 11668. 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



William A. Carmichael, District Director, Immigra- 
tion and Naturalization Service, United States Depart- 
ment of Justice, District No. 16, 



vs. 

Wong Choon Hoi, 



Appellant, 



Appellee. 



APPELLANT'S REPLY BRIEF. 



Chinese Merchants Classified as "Non-Immigrants" 
Under the 1924 Immigration Act. 

Appellee's argument is primarily centered on the propo- 
sition that it is undisputed that appellee's father was ad- 
mitted for "lawful permanent residence" under the treaty 
and that the communicated status of appellee, although his 
admission occurred after the 1924 Immigration Act, is of 
efjual legal standing. (Br. p. 3.) 1 



1 The abbreviation "Br." when used herein refers to Appellee's 
Brief. 



— 2— 

The authorities do not support this contention. (App. 
Br. pp. 28, 29, 34, 35, 36, 37.) 2 

It is true that the Supreme Court 3 held that the Chinese 
wives and minor children of merchants admitted prior to 
1924 were "* * * entitled to enter in pursuance of a 
treaty * * *" and were not excluded by the 1924 Im- 
migration Act for the reason that the immigration status 
of "merchant" as it existed prior to 1924 was under the 
Immigration Act of 1924, classifiable as "non-immigrant." 
This was a clear recognition by the Supreme Court that 
Chinese merchants admitted prior to the 1924 Immigration 
Act were regarded as holding an immigration status 
equivalent to the immigration status of "non-immigrant." 
The 1924 Immigration Act classified those aliens who 
were to be admissible for lawful permanent unrestricted 
residence as "immigrants" and "non-quota immigrants." 
The Supreme Court held that 4 "an alien entitled to enter 
the United States 'solely to carry on trade' under an exist- 
ing treaty of commerce and navigation is not an immigrant 
within the meaning of the Act, Section 3 (6) , and there- 
fore is not absolutely excluded by Section 13. * * * 
in a very definite sense they are specified by the act itself 
as 'non-immigrants.'" (Emphasis added.) 

Appellee erroneously concludes (Br. p. 10) that this 
Court 5 held that Yung Poy had "* * * legally entered 



2 The abbreviation "App. Br." when used herein refers to Appel- 
lant's Brief. 

Kheunq Sum Shee v. Nagle, 268 U. S. 336, 45 S. Ct. 539, 69 
L. Ed. 985. 

^Cheung Sum Slice v. Nagle, U. S. p. 540. 

*Haff v. Yung Poy (9th Cir.), 68 F. (2d) 203. The maintenance 
of the status of "merchant" provision of the 1917 Immigration 
Act, held not applicable to Chinese merchants, Wong Sun Fay v. 
U. S. (9th Cir.), 13 F. (2d) 67, 68. 



— 3— 

the United States for permanent residence pursuant to the 
treaty." The question of whether or not Yung Poy was 
possessed of an immigration status equivalent to "lawful 
permanent residence" was not before this Court. This 
Court found that the status of "merchant" or "son of 
merchant" had been lost. The Supreme Court decision in 
the case of Cheung Sum- Slice v. Nagle, supra, classifying 
"merchant" as a non-immigrant was cited by this Court. 
Yung Poy's right of admission was found to stem from 
that of his father who had entered the United States 
prior to 1924 and that since there was no provision making 
it a deportable offense under the prior acts of Congress 
for failure to maintain the status of merchant, this Court 
would not require the deportation of Yung Poy by reason 
of any of the provisions of the 1924 Act. 

An alien may be lawfully admitted to the United States 
and remain here unlawfully. 6 The mere fact that the acts 
of Congress prior to the 1924 Act did not make it un- 
lawful for a Chinese who had abandoned his mercantile 
status to remain in this country did not by implication 
clothe such Chinese with the immigration status of a 
"lawful permanent resident." Such Chinese w r as not made 
deportable under any of the prior laws for failure to 
maintain his mercantile status. Upon abandonment or 
loss of mercantile status such a Chinese w r as not held to 
acquire any other immigration status. The denial to a 
right of admission as the wife and minor children of a 
merchant was sustained by the Supreme Court where the 
Chinese husband-father after admission as a merchant, 



'Chung Yim v. U. S. (8th Cir.), 78 F. (2d) 43, 46. 



abandoned his mercantile status and became a laundry- 



man. 7 



It is incontrovertibly established by the foregoing au- 
thorities that the immigration status of a Chinese mer- 
chant prior to 1924 was limited as to "purpose," and that 
such merchant never possessed an immigration status of 
greater legal efficacy than "non-immigrant" as that term 
is defined in the 1924 Immigration Act. Whether the 
admission occurred before or after the 1924 Immigration 
Act, Chinese merchants were not classed as permanent 
residents, but were admitted as a preferred class for com- 
mercial purposes, despite the exclusion of Chinese aliens, 
"to go and come of their own free will and accord." In 
the Immigration Act of 1924, Congress deliberately ex- 
cluded treaty merchants from its designation of "immi- 
grants" — those aliens coming for permanent settlement — 
and classified them with the "non-immigrants" — whose 
admission to the United States was limited as to "period 
of time" or "purpose." 



Modification of the Treaty by the Amendment of 
July 6, 1932 to the Immigration Act of 1924. 

Appellee (Br. p. 4) contends that the treaty with China 
was not modified or abrogated by any of the acts of Con- 
gress, either expressly or by implication, until the passage 
of the Act of December 7, 1943, repealing the Chinese 
Exclusion Acts. This contention is untenable. The Su- 
preme Court has not had before it for construction the 
effect on the treaty of the amendment to the Immigration 
Act of 1924 by the Act of July 6, 1932. 8 Appellee was 



7 Ycc Won v. White, 256 U. S. 399, 41 S. Ct. 504, 65 L. Ed. 
1012; App. Br. p. 35, 36. 

8 Act of July 6, 1932 (47 Stat. 607; 8 U. S. C. 203). 



— 5— 

admitted to the United States after the effective date of 
this amendment. (App. Br. p. 18, footnote 25.) The 
legislators very definitely had in mind the treaty in passing 
this amendment. To a certain extent, however, it ap- 
pears that the amendment was for the purpose of codifi- 
cation of existing" law as it had been interpreted by the 
Supreme Court. That design clearly appears stated in the 
Congressional Committee report on this legislation: 9 

"The provisions of the section referred to (Sec. 
3 (6) of the 1924 Act) have also been interpreted as 
applicable to the wives and minor children of treaty 
aliens, in line with the holding of the Supreme Court 
in Cheung Sum Shee v. Nagle (268 U. S. 336). " 

The 1932 amendment made it necessary for a Chinese 
in order to qualify as a merchant to show that he was 
engaged in international trade between the United States 
and the country of which he was a citizen. It further 
limited admission of the children of a Chinese merchant 
to the unmarried children under 21. 10 Since this amend- 
ment in express terms does restrict the treaty, it would 
appear that the son, whose Chinese merchant father was 
admitted prior to 1924, was not entitled to admission 
solely on the basis of the treaty after the amendment sup- 
plying the statutory modification to the treaty found lack- 
ing under the decision in the case of Cheung Sum Shee 
v. Nagle, supra. 

The question of whether a minor child who first 
applies for admission after the 1932 amendment as the 
son of a Chinese merchant admitted prior to 1924, would 



9 House Rep. 431, 72d Congress, 1st Sess. See also 75th Cong. 
Rec. 13840. 

l0 App. Br. pp. 8, 9, footnotes 7, 8, and p. 18, footnotes 25, 26. 



be entitled to admission if his merchant father were not 
engaged in international trade is not found to have been 
decided by the courts. The 1932 amendment is found 
to be construed not to require a merchant who entered 
prior to the amendment, and who temporarily visited in 
Canada for a few months, to establish upon his return 
that he was engaged in international trade. 11 In deciding 
that the Supreme Court held, in effect, in the Cheung 
Sum Shoe v. Nagle decision, supra, that the treaty rights 
of Chinese merchants had not been affected by the Act of 
1924, in a later decision the Court stated, "* * * I 
believe the treaty and the statute were construed together 
in that case, and that the Supreme Court did not intend 
to hold that the treaty rights of Chinese merchants had 
not been in any way affected by the Act of 1924." 12 A 
regulation of the State Department requiring that a mer- 
chant be engaged in international trade was construed as 
being unauthorized under a similar provision of a treaty 
with Japan. 13 This regulation, however, was promulgated 
prior to the 1932 amendment to the Immigration Act of 
1924. In a decision involving the provision in the treaty 
with China relative to teachers, this Court 14 points out that 
"The Act of 1924, to some extent, circumscribes and 
limits the rights of students to be admitted, and limits 
the rights of teachers to professors of colleges * * *," 
and held that the rights of admission of a Chinese under 
the status of teacher was controlled and limited by the 
1924 Immigration Act, and pointed out that Chinese mer- 



ll Kaname Susuki v. Harris, 29 F. Supp. 46. 

12 U. S. v. Hughes, 9 F. Supp. 792, 796. 

l8 Shusuko Kumanomido v. Naglc (9th Cir.), 40 F. (2d) 42, 46. 

14 Jcu Jo Wan v. Naglc (9th Cir.), 9 F. (2d) 309, 310. 



— 7— 

chants and their families were not excluded by the 1924 
Act because no provision of that Act was in direct con- 
flict with the treaty rights of such classes. This decision 
takes cognizance of the provisions of Sections 25 and 
28(g) of the 1924 Act 15 which reflects a congressional 
intent to abrogate all laws, conventions and "treaties" re- 
lating to immigration, exclusion or expulsion of aliens 
inconsistent therewith. Article 4 of the treaty with China 
expressly provides for further legislation to regulate the 
admission of exempt Chinese and to minimize the oppor- 
tunities for evasion of the exclusion laws. 16 The 1932 
amendment to the 1924 Act does "circumscribe and limit" 
the treaty in question. This being so, it follows that Sec- 
tion 15 of the 1924 Act 17 and regulations thereunder, 18 
requiring the maintenance of exempt status of aliens ad- 
mitted after 1924 as non-immigrants, would be applicable 
to appellee even though his merchant father was admitted 
prior to 1924. The 1932 amendment applies to all na- 
tionals of foreign countries entering the United States 
under similar treaties of commerce and navigation. Any 
of the treaties containing provisions inconsistent with the 
1924 Act and specifically provisions inconsistent with the 
1932 amendment relating to merchants were abrogated as 
contemplated by Sections 25 and 28(g) of the 1924 Act. 
The decision in Cheung Sum Shee v. Nagle 19 decided only 
the narrow question of whether the omission in Section 



15 Secs. 25 and 28(g), Act of 1924 (43 Stat. 166; 8 U. S. C. 223, 
and 43 Stat. 168-169; 8 U. S. C. 224). 

1€, U. S. ex rel. Lam Shin Hing v. Cor si, 4 F. Supp. 591, 593. 

"Section 15, Act of 1924; 8 U. S. C. 215. 

18 App. Br. pp. 10, 11, 12, 21, footnotes 11, 12, 32. 

"Cheung Sum Slice v. Naglc, 268 U. S. 336, 45 S. Ct. 539, 69 
L. Ed. 985. 



3 (6) to mention the wives and children of merchants and 
the use of the words "solely to carry on trade" and the 
language contained in Sections 13(c) and 5 of the 1924 
Act showed any "congressional intent absolutely to ex- 
clude" the Chinese wives and children of merchants. The 
Immigration officials refused admission without reference 
to the provisions of Sections 25 and 28(g) of the 1924 
Act, 20 but solely on "the inhibition * * * found in 
paragraph (c) of section 13 and that portion of section 5 
which reads * * * 'An alien who is not particularly 
specified in this act as a nonquota immigrant or a non- 
immigrant shall not be admitted as a nonquota immigrant 
or a -nonimmigrant by reason of relationship to any in- 
dividual who is so specified or by reason of being ex- 
cepted from the operation of any other law regulating 
or forbidding immigration ." The decision further recites 
that the rule in the Mrs. Guc Lim case "* * * 
was not unknown to Congress when considering the 

* * *" 1924 Immigration Act. The express mention 
of wives and minor children of merchants was not in- 
cluded in the wording of the treaty. The authority for 
their entry nevertheless existed by implication as stated 
in the Mrs. Guc Lim case. It was, therefore, unneces- 
sary for Congress by express terms to mention them in 
the enactment of Section 3 (6) of the 1924 Act providing 
for the admission of merchants. "Merchants," their 
wives and children are then "In a very definite sense 

* * * specified by the Act itself as 'nonimmigrants.' " 
It was unnecessary for the Court to consider Sections 25 
and 28(g) of the 1924 Act, because it found no intention 



-"Sees. 25 and 28(g), 1924 Act (43 Stat. 166, 168-169; 8 U. 
S. C. 223, 224). Also see U. S. v. Hughes, 9 F. Supp. 792, 796. 



an the part of Congress to exclude from the use of the 
term "merchant" in Section 3 (6) of the 1924 Act, the 
"implicative" rights to admission of the zvives and chil- 
dren that had existed in the use of that term for "25 
years." This construction harmonizes the 1924 Act with 
the treaty. Otherwise, the Court would have been com- 
pelled to have given some expression to reasons why the 
.provisions of Sections 25 and 28(g) of the 1924 Act did 
not in clear and unmistakable language make excludable 
any alien although admissible under any "treaties" "* * * 
if he is excluded by any provisions of * * *" the 1924 
Immigration Act. This is the rationale of the decision 
in the Cheung Sum Slice v. Nagle case. 

Appellee contends that the right of wives and minor 
children to join after 1924 a merchant admitted prior to 
the effective date of the 1924 Act, is determinable solely 
on the laws that existed at the time of the merchant's 
admission. The 1924 Act provided an alien, in addition 
to being admissible under any "treaties," must also com- 
ply with all of the requirements for admission under the 
Act itself. The contention of appellee, if sustained, would 
result in the setting up of a class of aliens who after 1924 
could enter and re-enter without regard to the express 
provisions of the 1924 Act. 

The character of the Immigration status of "merchant" 
in relation to naturalization is significantly shown in the 
decision of a court 21 in denying naturalization to a native 
born citizen of the United States upon her return to this 
Country under the status of wife of an Italian treaty 



n In re Pezzi, 29 F. (2d) 999, 1002. 



— 10— 

merchant following loss of her citizenship by marriage in 

1920: 

"Has the petitioner here met the requirements of 
the law? I think not. The petitioner has no status 
in the United States, other than being the wife of her 
husband. Her husband's status is defined by the pro- 
visions of section 3, of the Quota Act of 1924 and 
the treaty of commerce and navigation between the 
United States and Italy of 1871 (17 Stat. 845). 
This treaty defines the status of 'Italian citizens in 
the United States and citizens of the United States 
in Italy.' Article 1. It clearly contemplates the tem- 
porary stay of the merchants of one country in the 
territory of the other. It accentuates the fact that 
the citizen of one counrty is entitled to certain rights 
and privileges in the other country, including the 
privilege of being accompanied by wife, minor chil- 
dren, servants, etc., solely and wholly because such 
citizen of one country is in the other country tem- 
porarily and for no other purpose than to carry on 
trade. There is not the slightest thought involved 
in the language of the treaty that the citizen of one 
country, residing in the other country as a treaty 
merchant, is laying the foundation for becoming a 
citizen of the other. Everything in the treaty nega- 
tives that thought." 

Judicial expression again classes merchants with those 
aliens whose sojourn in this country is of a temporary 
character : 22 

"* * * aliens who seek admission to the United 
States are divided into three classes: nonimmigrants, 
nonquota immigrants and quota immigrants, 8 U. S. 
C. A. Sees. 203, 204, 205. Nonimmigrants are al- 



22 



U. S. v. Carusi, 72 F. Supp. 195. 



—11— 

lowed admission under a policy of promoting good 
relations among the peoples of the world; e.g., the 
two most numerous groups in this class are alien 
seamen, members of a crew, and alien visitors, on 
business or pleasure. Petitioner, a treaty merchant, 
falls into this class, and was entitled to enter the 
United States solely to carry on trade authorized by 
the provisions of a treaty of commerce and navigation 
with the country of which he was a national/' 

Certain Actions of the Immigration and Naturalization 
Service Not of Binding Effect on This Court. 

Appellee contends that the Government holds "an in- 
consistent view" (Br. p. 13) because of certain actions 
of the Immigration and Naturalization Service with re- 
spect to applications of Chinese merchants for citizenship 
where admission occurred prior to July 1, 1924. 

Chinese admitted as merchants prior to the effective 
date of the basic naturalization act of June 29, 1906, 
like other aliens, are not required to file with their ap- 
plications for naturalization, certificates showing lawful 
admission for permanent residence. It is only necessary 
that such aliens establish that the residence acquired prior 
to 1906 has not been abandoned. Since Chinese became 
racially eligible for naturalization on December 17, 1943, 
it is true that in a very limited number of cases no op- 
position has been made to the naturalization of Chinese 
admitted as "merchants" subsequent to 1906 and prior to 
July 1, 1924. Such action over a brief period of time 
in a limited number of cases cannot have any binding 
effect in the instant determination. It only emphasizes 
the need for judicial clarification for the guidance of the 
Immigration and Naturalization Service as that problem 
may be relevant to the present issue. 



—12— 

Relevancy of Immigration Status as a Basis for 

Naturalization. 

Appellee raises the further contention that none of the 
cases relied on by the Government as listed in his brief 
(Br. pp. 10, 11, 12) are in point, because none of the 
cases relate to an admission pursuant to the treaty with 
China. 

Appellee's qualifications for naturalization founded on 
the immigration status of "son of a merchant" must be 
measured in the terms of the nationality Act in deciding 
whether he has been "lawfully admitted for permanent 
residence" as that phrase is used and construed under the 
naturalization laws. Residence which may be deemed law- 
ful for immigration purposes may not meet the rigid tests 
for naturalization. 23 



23 In re Simniolkjier, 71 F. Supp. 553; App. Br. p. 23. See also 
8 C. F. R. 110.38, which provides: 

"Citizens of Canada or Newfoundland who entered the 
United States across the Canadian border prior to October 1, 
1906, and citizens of Mexico who entered across the Mexican 
border prior to July 1, 1908, shall, for re-entry purposes, be 
presumed to have been lawfully admitted even though no rec- 
ord of their original entry can be found. [Sentence amended: 
effective October 17, 1945; published 10 F. R. 12956, October 
18, 1945.] Aliens who entered the Virgin Islands of the 
United States prior to July 1, 1938, shall, for purposes of re- 
entry at any port of entry, be presumed to have been lawfully 
admitted for permanent residence even though no record of 
their original entry can be found or even though a record of 
their admission as nonimmigrants is found. Any alien within 
the terms of this section shall upon application for readmission 
to the United States be inspected and be subject to the require- 
ments of the immigration laws and regulations the same as if 
the original presumed lawful entry was by recorded admission 
for permanent residence ; and if no record exists of a re-entry 
since such presumed lawful entry, the alien shall be regularly 
manifested for the purpose of recording the application for re- 
admission. Nothing in this section shall be deemed to preclude 



—13— 

The rule of construction in naturalization matters is 
succinctly stated by Mr. Justice McReynolds as follows: 24 

"An alien who seeks political rights as a member 
of this nation can rightfuly obtain them only upon 
terms and conditions specified by Congress. Courts 
are without authority to sanction changes or modifi- 
cations ; their duty is rigidly to enforce the legislative 
will in respect of a matter so vital to the public wel- 
fare/' 

Chinese as well as other aliens whose residence in this 
country began prior to the effective date of the Immigra- 
tion Act of 1924, upon regularizing their entries through 
registry proceedings, 20 may then meet the requirements 
for naturalization without departing and re-entering the 
United States. The naturalization laws specifically pro- 
vide that a registry of entry when so created is sufficient. 26 
The appellee cannot avail himself of this privilege since 
his admission occurred subsequent to July 1, 1924. He 



an alien qualified to do so from applying for registry under 
section 328(b) of the Act of October 14, 1940 (54 Stat. 1152; 
8 U. S. C. 728b)." 

It is further provided in 8 C. F. R. 363.7 that: 

"No certificate of arrival shall be issued in behalf of an 
alien on the basis of an original entry which under the provi- 
sions of Sec. 110.38 of this chapter is presumed for re-entry 
purposes to have been a lawful admission for permanent resi- 
dence. A certificate of arrival will be issued on the basis of 
the re-entry of such an alien where there is a manifest record 
showing that the entry was by lawful admission for permanent 
residence. [Section added: effective January 9, 1945; 10 F. 
R. 447, January 11, 1945.]" 

24 U. S. v. Ginsberg, 243 U. S. 472, 37 S. Ct. 422, 61 L. Ed. 853. 

25 Sec. 328(b), Nationality Act of 1940 (54 Stat. 1152; 8 U. S. 
C. 728). 

26 Sec. 328(c), Nationality Act of 1940 (54 Stat. 1152; 8 U. S. C. 
728). See also App. Br. p. 37. 



—14— 

may, however, have created a registry of entry for natural- 
ization purposes by departing from the United States and 
re-entering under the status of a preference quota immi- 
grant by reason of his marriage to an American citizen 
subsequent to July 1, 1932. 27 

Respectfully submitted, 

James M. Carter, 

United States Attorney; 

Ronald Walker, 

Assistant United States Attorney, 

Attorneys for Appellant. 

Bruce G. Barber, 

Chief, District Adjudications Division 
Immigration and Naturalization Service 
on the Brief. 



27 Sec. 6, 1924 Immigration Act (43 Stat. 155-156; 47 Stat. 656; 
45 Stat. 1009; 8 U. S. C. 206). 




No, 11,669 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



Division of Labor Law Enforcement, State of Cali- 
fornia, statutory assignee etc., 

Appellant, 
vs. 
George T. Goggin, Trustee in Bankruptcy of the 
Estate of Kessco Engineering Corporation, and 
Harry C. Westover, Collector of Internal Revenue for 
the Sixth Collection District of California, 

Appellees. 



Upon Appeal from the District Court of the United States for the 
Southern District of California, Central Division. 



BRIEF FOR THE COLLECTOR. 



Sewall Key, 
Acting Assistant Attorney General, 

A. F. Prescott, 
Fred E. Youngman, 

Special Assistants to the Attorney General. 

600 U. S. Postoffice and Courthouse 
Building, Los Angeles 12, California, 

James M. Carter, 

United States Attorney, 

Loren P. Oakes, 

Special Attorney. Bureau of Internal Revenue. 

miBN 

Martin Gendel, ulm 

607 James Oviatt Building, Los Angeles 14, 

Attorney for Appellee, George T. Goggin, Trustee in 
mkruptcy of Estate of Kessco Engineering Cor- 
poration. 



Parker & Company, Law Printers, Los Angeles. ' Phone TR. 5206. 



TOPICAL INDEX 

PAGE 

Opinion below 1 

Jurisdiction 2 

Question presented 3 

Statutes involved 4 

Statement 4 

Summary of argument 9 

Argument 10 

The court below did not err in holding", under the facts, that 
the Collector of Internal Revenue has a lien superior to all 
other claims upon the balance of funds remaining in the 
hands of the trustee after payment of expenses of adminis- 
tration 10 

Conclusion 19 

Appendix : 

Excerpts from Bankruptcy Act (1898), Chap. 541, 30 Stat. 
544, as amended by the Act of June 22, 1938, Chap. 575, 
52 Stat. 840, Sec. 1 App. p. 1 



TABLE OF AUTHORITIES CITED 

Cases page 

City of New York v. Hall, 139 F. (2d) 935 15 

Davis v. City of New York, 119 F. (2d) 559 15 

Freeman Furniture Factories v. Bowlds, 136 F. (2d) 136 18 

Jackson Brick & Tile Co., In re, 189 Fed. 636 14 

Jay & Dee Store Co., In re, 37 F. Supp. 989 15 

Lebed, In re, 39 F. Supp. 457 16, 17 

San Joaquin Valley Packing Co., In re, 295 Fed. 311 15 

Straton v. New, 283 U. S. 318 14 

Van Huffel v. Harkelrode, 284 U. S. 225 18 

Statutes 

Bankruptcy Act, Sec. 18 2 

Bankruptcy Act, Sec. 24(a) 3 

Bankruptcy Act, Sec. 25(a) 3 

Bankruptcy Act, Sec. 64(a) 9, 12, 13, 15, 17 

Bankruptcy Act, Sec. 67(b) 13 

Bankruptcy Act, Sec. 67(c) 9, 11, 13, 14, 15, 16, 17, 18 

Judicial Code, Sec. 128(c) 3 

Textbooks 

4 Collier on Bankruptcy (14th Ed.), pp. 234, 1606-1609 18 

4 Collier on Bankruptcy (14th Ed.), pars. 67.27, 67.28. pp. 234- 
250 16 

5 Remington on Bankruptcy (4th Ed.), p. 330 15 



No. 11,669 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



Division of Labor Law Enforcement, State of Cali- 
fornia, statutory assignee etc., 

Appellant, 
vs. 

George T. Goggin, Trustee in Bankruptcy of the 
Estate of Kessco Engineering Corporation, and 
Harry C. Westover, Collector of Internal Revenue for 
the Sixth Collection District of California, 

Appellees. 



BRIEF FOR THE COLLECTOR. 



Opinion Below. 

The court below did not file a written opinion. The 
findings of fact and conclusions of law of the Referee in 
Bankruptcy, which were adopted as its own, and the order 
of the referee, which was in all respects confirmed by the 
court below [R. 35-36], are set out in the record at pages 
9 to 14, inclusive. 1 



x By order of the District Court [R. 47], the appellant was al- 
lowed to prosecute this appeal in forma pauperis and the record on 
appeal has not been printed. 



— 2— 

Jurisdiction. 

This proceeding arose in the District Court of the 
United States for the Southern District of California, 
Central Division, upon a voluntary petition in bankruptcy 
[R. 2-3], hied pursuant to Section 18 of the Bankruptcy 
Act, as amended, by Kessco Engineering Corporation, a 
California corporation, with its principal place of busi- 
ness at Los Angeles, California, on March 26, 1946, and 
an adjudication of bankruptcy and general reference made 
by that court on the same date [R. 4]. Jurisdiction of 
the court below in the premises is conferred by Section 
11 of the Bankruptcy Act, as amended. Under date of 
October 17, 1946, the Trustee in Bankruptcy filed a peti- 
tion, stating that the Collector of Internal Revenue and 
the Department of Employment of the State of Califor- 
nia had filed certain tax claims, claiming a lien upon the 
assets in the hands of the trustee, and that in addition 
thereto certain labor claimants asserting prior labor claims 
had filed their labor claims either through the Division of 
Labor Law Enforcement of the State of California or 
individually, and requesting that an order be issued re- 
quiring such claimants to appear and show cause why the 
order of priority of payment of their claims and of the 
expenses of administration should not be determined by 
the court [R. 5-6, 24]. An appropriate order to show 
cause was issued under date of October 18, 1946 [R. 7-8, 
24]. A hearing pursuant to the order to show cause was 
held before the referee on October 30, 1946 | R. 9, 24], 
on the basis of which the referee, under date of December 
12, 1946, entered his findings of fact, conclusions of law, 
and order [R. 9-14]. Under date of December 17, 1946, 
the Division of Labor Law Enforcement, Department of 



— 3— 

Industrial Relations, State of California, representing all 
prior wage claimants [R. 9, 36], filed a petition for re- 
view by the court below of the referee's order of Decem- 
ber 12, 1946 [R. 15-22]. The referee's certification peti- 
tion for review of the order of December 12, 1946 [R. 
23-29], was filed with the court below on January 20, 1947 
[R. 29], and a minute order affirming the referee's order 
of December 12, 1946, was entered by the District Court 
under date of March 31, 1947 [R. 31]. Notice of ap- 
peal from such minute order was filed by the Division of 
Labor Law Enforcement, Department of Industrial Re- 
lations, State of California, pursuant to Section 25(a) of 
the Bankruptcy Act, as amended, on April 28, 1947 [R. 
32]. Under date of May 6, 1947, the referee filed with 
the District Court a supplemental certificate on the peti- 
tion for review giving the names of all prior wage claim- 
ants represented by the Division of Labor Law Enforce- 
ment and the amount of their respective claims [R. 33- 
34], and on May 21, 1947, the District Court entered its 
judgment confirming the order of the referee and adopt- 
ing as its own the findings of fact and conclusions of law 
of the referee [R. 35-36]. Notice of appeal was filed 
May 21, 1947 [R. 48]. 

The jurisdiction of this Court to hear and determine 
this appeal is conferred by Section 24(a) of the Bank- 
ruptcy Act, as amended, and Section 128(c) of the Judicial 
Code. 

Question Presented. 

The only question involved is whether the court below, 
in affirming the order of the referee in bankruptcy, erred 
in holding that under the facts the Collector of Internal 



Revenue has a lien superior to all other claims on the 
funds which will remain in the hands of the trustee in 
bankruptcy after costs of administration as allowed by 
the court have been paid. 

Statutes Involved. 

The applicable provisions of the Bankruptcy Act, as 
amended, are printed in the Appendix, infra, pp. 1-3. 

Statement. 

The court below adopted as its own findings of fact [R. 
31, 35-36], the findings of fact made by the referee in 
bankruptcy [R. 9-12], which are, briefly, that prior to 
the commencement of the present bankruptcy proceedings 
on March 26, 1946, the Collector of Internal Revenue for 
the Sixth Collection District of California, one of the 
appellees here [R. 10] — 

was in physical possession of the personal property 
of the within bankrupt having made a seizure pur- 
suant to the tax claims of the Collector 

against the bankrupt in the sum of $40,921.94," and that 
in addition to having made a physical seizure of the per- 
sonal property of the bankrupt, Kessco Engineering Cor- 
poration, the Collector, had, prior to March 26, 1946, filed 
notices of lien with respect to various taxes, including the 
taxes here involved [R. 10] . 3 



2 According to a schedule of assessments attached as an exhibit to 
the finding of the referee [R. 10, 14 1. 

8 By stipulation oi the parties the original claim for $40,921.94 
was disallowed, and was superseded by an amended claim for the 
sum of $78,865.03 |R. 10]. 



— 5— 

On or about April 27, 1946, the Department of Em- 
ployment of the State of California filed a tax claim with 
the trustee in the sum of $15,135, which had been recorded 
as a lien on or about December 24, 1945 [ R. 10-1 1]. 4 

Certain labor claims also were filed with the trustee. In 
a petition to show cause why the tax and labor claimants 
should not have their respective priorities determined by 
the court below, the trustee listed certain labor claimants 
who had either filed their claims individually or through 
the Division of Labor Law Enforcement of the State of 
California [R. 5-6]. The referee found that such claim- 
ants had owing to them as of March 26, 1946, the date of 
commencement of the bankruptcy proceedings, for serv- 
ices rendered to the bankrupt within 90 days prior to the 
adjudication in bankruptcy, the total sum of $2,838.79, 
and that the Division of Labor Law Enforcement was ap- 
pearing on behalf of all such claimants [R. 11]. In his 
supplemental certificate on the petition of the Division of 
Labor Law Enforcement for review by the court below of 
his order determining priorities, the referee listed labor 
claimants having filed labor claims in the total sum of 
$3,424.87 [R. 33-34]. 

After the adjudication in bankruptcy the personal prop- 
erty of the bankrupt then in the possession of the Col- 
lector of Internal Revenue was turned over by the Col- 
lector to the trustee in bankruptcy, who accepted it subject 
to the terms and conditions of a telegram from J. P. 



*This claim does not seem to be involved in the present appeal. 



Wenchel, then Chief Counsel of the Bureau of Internal 
Revenue, which reads as follows [R. 11-12] : 

Reference to telephone conversation today with Mr. 
Webb relative to Kessco Engineering Corporation, 
Bankrupt, no objection by this office to Collector re- 
linquishing personal property to Trustee for sale. 
Government's lien to attach to proceeds from sale sub- 
ject to Trustee's expenses including costs of sale. 

J. P. Wenchel 
Chief Counsel. 

In his certificate on the petition for review of his order 
of December 12, 1946, covering the disbursement of as- 
sets of the bankrupt estate [R. 23-29], the referee 
elaborated upon the foregoing findings to the extent of 
stating that the trustee had liquidated all of the assets 
which had come into his possession and that the funds 
which he has on hand are insufficient to pay in full the 
expenses of administration, the lien claims, and the prior 
labor claims and prior tax claims [R. 23] ; that the Col- 
lector of Internal Revenue and the Department of Em- 
ployment of the State of California (representing the prior 
labor claimants) had asserted liens which were in effect 
at the time of the commencement of the receivership pro- 
ceeding [R. 23-24] ; that at the hearing before the referee 
it was conceded by all parties concerned that at the time 
of the commencement of the bankruptcy proceeding the 
Collector was in physical possession of all the assets of the 
bankrupt later liquidated by the trustee and that the Col- 
lector at that time had a valid lien on such assets of the 
bankrupt superior to all other claimants in the matter [R. 
24] ; that the Division of Labor Law Enforcement, rep- 
resenting the prior labor claimants, took the position that 
by surrendering the physical possession of the assets in 



—7— 

question to the then receiver, had lost the superior posi- 
tion which his lien had theretofore enjoyed [R. 24, 25]. 

In that part of his certificate dealing with the evidence 
in the case the referee stated that on the date of the com- 
mencement of the bankruptcy proceeding the assets of 
the bankrupt, later liquidated by the trustee, were in the 
physical possession of the Collector of Internal Revenue 
[R. 26], The Collector previously had made a seizure of 
the assets of the bankrupt pursuant to certain tax claims 
asserted against the bankrupt [R. 26]. In addition to hav- 
ing made physical seizure of the property of the bankrupt 
the Collector had, prior to commencement of the bank- 
ruptcy proceeding, filed notices of lien with respect to 
various taxes, including the taxes here involved, and that 
pursuant to his legal rights in the premises the Collector 
had conducted a sale of the assets involved and received 
bids thereon [R. 26-27] ; that the sale was not completed 
because the price obtained was unsatisfactory, and that a 
second sale by the Collector was instituted but was aban- 
doned when the assets of the bankrupt then in his pos- 
session were delivered to the receiver (now trustee) of the 
bankrupt estate [R. 27]. Upon his appointment and quali- 
fication as receiver, he contacted the Collector of Internal 
Revenue and conversations were had between the receiver 
and counsel in the Los Angeles office of the Collector re- 
lating to the turning over to the receiver of the assets of 
the bankrupt in the possession of the Collector. These 
conversations culminated in the receipt by the Collector 
of the foregoing telegram from the Chief Counsel of the 
Bureau of Internal Revenue, on the basis of which the 
Collector turned over to the referee the seized assets of 
the bankrupt which were in his possession at the time 
of commencement of the bankruptcy proceeding [R. 27]. 



In his certificate to the court below, mentioned above, 
the Referee in Bankruptcy said the contents of the tele- 
gram from the Chief Counsel for the Bureau of Internal 
Revenue were imparted by telephone to the office of the 
receiver and that no formal acceptance or acknowledg- 
ment of it was made by the receiver. No notice of the 
telegram or its contents was given to any of the creditors 
of the bankrupt or other parties in interest in the bank- 
ruptcy proceeding, and no notice thereof was given at the 
time of trustee's sale of the assets involved. After the 
contents of the telegram in question had been imparted 
to the office of the trustee, the trustee, with full knowl- 
edge of the telegram from the Chief Counsel of the 
Bureau of Internal Revenue and of its contents, and with- 
out any objection thereto, took over the possession of the 
assets from the Collector. Later the receiver, in his ca- 
pacity as Trustee in Bankruptcy, caused the assets in- 
volved to be sold at public auction pursuant to order 
of the court below [R. 28], 

On the basis of the evidence before him the Referee in 
Bankruptcy concluded as a matter of law that the ex- 
penses of administration should first be paid from the 
funds in the hands of the trustee, and that after payment 
of such expenses of administration the Collector of In- 
ternal Revenue has a lien superior to all other claimants 
upon the balance of the funds (insufficient to pay the full 
amount of his secured tax claims) by reason of his seiz- 
ure of the property of the bankrupt prior to commence- 
ment of the bankruptcy [R. 12]. The trustee's conclu- 
sions of law and order entered in accordance therewith 
| R. 12-13] were in all respects affirmed by the court 
below [R. 31, 35-36]. 



Summary of Argument. 

The lien of the Collector of Internal Revenue for un- 
paid taxes was, under the circumstances of this case, 
superior to all other liens and claims except costs of ad- 
ministration, which the Government had expressly agreed 
should be paid ahead of the claim for taxes. At the time 
the petition in bankruptcy was filed the Collector was, 
pursuant to his lien for taxes, in physical possession of 
the personal property of the bankrupt, and in that sit- 
uation the Collector had a lien on the property here in- 
volved superior to all other claims. Under Section 67c 
of the Bankruptcy Act, as amended, the property was not 
subject at the time of bankruptcy to the priority in pay- 
ment prescribed by Section 64a of the Act. 

After the adjudication in bankruptcy the Collector, fol- 
lowing negotiations looking to such an arrangement, re- 
leased to the Receiver in Bankruptcy, for sale, the per- 
sonal property of the bankrupt, pursuant to authority from 
the Chief Counsel for the Bureau of Internal Revenue, 
which authorized such release on the condition that the 
Government's lien should attach to the proceeds from the 
sale "subject to Trustee's expenses including costs of 
sale." The conditions thus attached by the Government 
to the release and sale of the personal property involved 
did not subordinate the secured claim of the Collector to 
prior wage claims against the bankrupt estate. 

The rights of the parties here involved were properly 
determined by the court below in accordance with the 
agreement of the Government and the Referee in Bank- 
ruptcy. Wage claimants were not necessary parties to 
that agreement and obtained no additional rights therein-. 



—10— 

ARGUMENT. 

The Court Below Did Not Err in Holding, Under the 
Facts, That the Collector of Internal Revenue 
Has a Lien Superior to All Other Claims Upon 
the Balance of Funds Remaining in the Hands of 
the Trustee After Payment of Expenses of Ad- 
ministration. 

The legal question involved in this case appears to be 
unique. The referee found [R. 9-10], and the appellant 
admits (Br. 5, 7), that at the time of the commencement 
of the bankruptcy proceeding the Collector was in pos- 
session of all the personal property of the bankrupt, hav- 
ing seized such property to satisfy outstanding liens of 
the Federal Government. The appellant, inferentially at 
least (Br. 7), admits that by reason of his possession of 
the personal property of the bankrupt prior to the ad- 
judication, he had a lien superior to all other claimants. 
The appellant even goes to the extent of pointing out that 
the Collector could have avoided this controversy if he had 
retained possession of the property involved and foreclosed 
his tax liens by separate sale of the property in question 
(Br. 13). 

The contention of the appellant is that by surrendering 
possession of the personal property of the bankrupt, the 
Collector lost the priority in payment which otherwise was 
assured him by the Bankruptcy Act, as amended, and that 
his claim for payment is thereby relegated to an inferior 
position and can be paid only after the payment of ex- 
penses of administration and prior wage claims (Br. 11- 
15); that any private agreement between the receiver or 
trustee and the Collector of Internal Revenue concerning 
the attachment of statutory liens to the proceeds of a 
trustee's sale, when possession of the personal property of 



—li- 
the bankrupt was voluntarily transferred to the receiver 
or trustee, would not be binding upon prior wage claim- 
ants (Br. 15-18); and that under Section 67c of the 
Bankruptcy Act, as amended [Appendix, infra], admin- 
istration expenses and wage claims are jointly given 
priority over statutory liens not accompanied by posses- 
sion (Br. 18-19). As a part of this argument it is in- 
sisted (Br. 12-15) that the possession of the lienholder 
contemplated by Section 67c of the Bankruptcy Act, as 
amended "means actual possession prior to and subse- 
quent to tiling of the petition in bankruptcy." The au- 
thorities cited by the appellant (Br. 13-15) do not require 
this construction of the applicable section of the Bank- 
ruptcy Act and we know of no authority which does re- 
quire such construction. 

While the appellant's argument, unsupported by any 
convincing authority, is based upon the proposition that 
the Collector, by surrendering possession of the personal 
property of the bankrupt to the receiver, thereby lost all 
priorities under the statute, the conclusion of the referee 
and the decision of the court below are based upon an en- 
tirely different understanding of the facts and the law. 
In his certificate on the appellant's petition for review of 
his order of December 12, 1946, the referee points out 
[R. 24-25] that he rejected the contentions of the appel- 
lant and held that — 

under the terms and conditions of the relinquishment 
by the Collector to the then receiver in this matter 
of the physical possession of the aforesaid assets 



B This is the same theory advanced by the appellant in its peti- 
tion for review of the referee's order of December 12. 1946 [R 
15-22]. 



—12— 

the Collector had a lien on the proceeds of the trustee's 
sale superior to all other claimants and subject only to 
the payment of the expenses of administration as allowed 
by the bankruptcy court. In his statement of the 
questions presented [R. 25-26], the referee still fur- 
ther amplifies the basis of his decision to the extent of 
pointing out that it was based upon the agreement of the 
parties most directly interested rather than upon the pro- 
vision of the Bankruptcy Act which would have been 
controlling in the absence of such agreement. 

In other words, the referee and the court below have 
given effect to the considered agreement of the trustee 
and the Government, which was the only party fully 
covered and protected by the statute, while the appellant 
is contending that any such agreement is a nullity under 
the Bankruptcy Act. G Any such notion certainly is not 
in keeping with the spirit of the Bankruptcy Act, and is 
not supported by any of the authorities cited by the appel- 
lant (Br. 11-19). j 

Section 64a of the Bankruptcy Act, as amended [Ap- 
pendix, infra], provides for the payment of debts of the 
bankrupt, including taxes, having priority before any pay- 
ment distribution to general creditors, and specifies the 
order of such payment. Expenses of administration of 
the bankrupt estate are given first priority; wages, not to 
exceed $600 to each claimant, are to be paid next. Sec- 



"Certainly the Collector could not have released the assets of the 
bankrupt under any conditons other than the conditions authorized 
by the Commissioner of Internal Revenue, and it is extremely doubt- 
ful whether, as a matter of law, the Commissioner or the Collector 
could have released the property under any conditions other than 
those authorized. 



—13— 

tion 67b of the Act, as amended [Appendix, infra], re- 
lates to certain classes of liens, including - liens for taxes 
and debts owing to the United States, and Section 67(c), 
upon which the appellant principally relies in this pro- 
ceeding, provides that where not enforced by sale before 
the riling of a petition in bankruptcy, though valid under 
subsection (b) of Section 67, such statutory liens, includ- 
ing liens for taxes or debts owing the United States, "on 
personal property not accompanied by possession of such 
property," and liens whether statutory or not, of distress 
for rent shall be postponed in payment of the debts ( costs 
of administration and labor claims) specified in clauses 
(1) and (2) of Section 64a of the Bankruptcy Act, as 
amended. 

If the tax liens of the Collector here involved had not 
been "accompanied by possession" of the personal prop- 
erty of the bankrupt at the time the petition in bankruptcy 
was filed, his tax claims would have been deferred in 
payment until after the payment of costs of administra- 
tion and labor claims as provided in Section 64a of the 
Bankruptcy Act. But his liens for the taxes here involved 
were accompanied by possession of the personal property 
of the bankrupt at the time the action was commenced, and 
there is nothing in the Bankruptcy Act which would justify 
holding that his possession of such property must be re- 
tained in order to protect the priority in payment which 
he then enjoyed. 

The appellant admits (Br. 12) that the question of pos- 
session was not involved in the first two cases cited for the 
proposition that wage claimants represented by the appel- 
lant are entitled to priority in payment under Section 67c 
of the Bankruptcy Act, as amended. Nor do the authori- 



-14— 

ties cited therefor (Br. 12-15) support the appellant's con- 
tention that the possession by the lienholder contemplated 
by Section 67c of the Bankruptcy Act is actual possession 
"prior to and subsequent to" (Br. 12) filing of the peti- 
tion in bankruptcy. Here the Collector had actual pos- 
session of the personal property of the bankrupt both 
"prior to" and "subsequent to" the filing of the petition, 
until it was released to the receiver on condition that the 
Collector's claims should be paid ahead of all other claims 
after payment of costs of administration. What the ap- 
pellant apparently contends is that by surrendering pos- 
session of the assets in question to the receiver, regardless 
of the terms and conditions under which property was 
surrendered, the Collector lost the priority which he previ- 
ously enjoyed by reason of his physical possession of the 
personal property of the bankrupt. The authorities cited 
(Br. 13-17) do not so hold. 

/;/ re Jackson Brick & Tile Co., 189 Fed. 636 (Mo.), 
is cited (Br. 15) for the proposition that where a lienor 
voluntarily appears before a referee, presents his claim 
as a secured claim, and seeks its allowance, the referee 
may summarily determine the validity of the lien so as- 
serted. We do not question this general principle of bank- 
ruptcy law. In the instant case the referee determined 
the validity of the Government's lien on the basis of the 
facts presented to him and there is nothing in the case 
just cited to indicate that his determination was wrong. 

Straton v. New, 283 U. S. 318, cited by the appellant 
(Br. 13), does not have even a remote bearing upon the 
question here involved. It is cited only as authority for 

the assertion that if the Collector had proceeded with the 
sale of the personal property of the bankrupt then in his 



—15— 

possession the trustee could have appeared in the sale 
proceeding and seized for the bankrupt estate any excess 
of the proceeds after the Collector's lien had been satis- 
fied. Also, the quotation from 5 Remington on Bank- 
ruptcy (4th Ed.), 330 (Br. 13) is not authority for the 
proposition that the Collector could not surrender to the 
receiver the personal property of the bankrupt under an 
agreement which would protect his priority after payment 
of the costs of administration. 

In re San Joaquin Valley Packing Co., 295 Fed. 311, 
cited by the appellant (Br. 14), was decided by this Court 
long before Section 67c of the Bankruptcy Act was 
amended by the Act of 1938, and the decision there had 
no bearing upon the question here involved. Likewise, 
City of New York v. Hall, 139 F. (2d) 935 (C. C. A. 
2d), cited by the appellant (Br. 14), is not in point. That 
case holds only that "constructive possession" by a prior 
lien claimant is not sufficient under Section 67c of the 
Bankruptcy Act, as amended, to defeat the priority given 
to costs of administration and labor claims by Section 
64(a) of the Act. But in this case it is admitted that the 
Collector had actual possession of the assets in question 
at the time the bankruptcy proceeding was instituted. In 
that respect the case is similar to Davis v. City of New 
York, 119 F. (2d) 559 (C. C. A. 2d), except that in the 
latter case the attached property was sold by the taxing 
authorities instead of being turned over to the referee 
under an agreement preserving the priority of such tax- 
ing authorities. 

In re Jay & Dee Store Co., 37 F. Supp. 989 < E. D. 

Pa. J, cited by the appellant (Br. 14-15), likewise is not a 
case involving a lien for taxes "accompanied by posses- 



—16— 

sion" of personal property of the bankrupt, and does not 
involve the right of such a lienor to deliver such property 
over to the referee under an agreement which would pro- 
tect his priority. Instead, the case involves a claim for 
rent — rather than a claim for taxes — and Section 67c of 
the Bankruptcy Act, as amended, makes a clear differentia- 
tion between liens for taxes "accompanied by possession" 
and liens for rent. Tax claims are not subordinated by 
Section 67c to the payment of costs of administration 
and wage claims where the tax lien is "accompanied by 
possession" of the personal property subject to the lien, 
while liens for rent are subordinate to such claims, re- 
gardless of whether accompanied by possession, provided 
the lien for rent has not been enforced by sale prior to 
bankruptcy. 7 

In re Lcbed, 39 F. Supp. 457 (E. D. Pa.), cited by the 
appellant (Br. 15-16), also is distinguishable from the 
instant case because it also involved a lien for rent rather 
than a lien for taxes "accompanied by possession" of the 
attached property of the bankrupt. 

In re Lebed, supra, is cited and quoted from by the ap- 
pellant principally in support of its contention (Br. 15-18) 
that any agreement between the receiver or trustee and 
the Collector concerning the attachment of the Collector's 
statutory lien to the proceeds of a trustee's sale under the 
circumstances here involved would not be binding on the 
prior wage claimants. That case, as must the instant 
case, turned upon its own peculiar facts. It appears that 



7 For a full discussion regarding the subordination of liens for 
taxes, rents, etc.. to administration expenses and wage claims, see 
4 Collier on Bankruptcy (14th Ed.), pars. 07.27 and 67.28, p. 
234-250. 



—17— 

in that case certain creditors had induced the rent claim- 
ants to postpone until after bankruptcy the sale to enforce 
their liens for rent. This postponing inevitably made ap- 
plicable the subordinating provisions of Section 67c of the 
Bankruptcy Act. Upon equitable principles the court 
naturally held that the creditors who had induced the 
lessors to postpone the sale should not benefit by the sub- 
ordinating provisions of Section 67c. However, the 
creditors who had not joined in inducing the lessors to 
postpone their sale and who had not entered into any 
agreement relative thereto were, of course, free to claim 
the benefit of Section 67c. 

There is a marked contrast between the Lebed case, 
supra, and the instant case because in the Lebed case the 
rent claimants had been subordinated by Section 67c and 
could only escape such subordination to the extent that 
the other creditors involved could be estopped to claim 
priority under Section 64a of the Act. Here, however, 
the Collector had possession of the personal property at 
the time of bankruptcy and payment of his claim was 
not subordinate to the costs of administration and wage 
claims. Hence, we perceive no reason why he was not 
free to enter into any kind of an agreement with the re- 
ceiver for the sale of such assets without subordinating his 
claim to prior wage claims. Nor do we perceive any rea- 
son why the wage claimants would have to be made par- 
ties to such an agreement in order to effectively protect 
the existing priority of the Government. The Collector's 
action effected approximately the result, except for a pos- 
sible difference in the amount of the proceeds received, 
that would have obtained if the Collector had sold the 
property involved in order to satisfy his tax liens rather 



—18— 

than releasing it to the receiver for sale. To hold that 
under the circumstances his tax claim must be subordi- 
nated to the wage claims involved would be inequitable, 
to say the least. It has long been recognized that bank- 
ruptcy courts have power to sell property free from liens 
and transfer the liens to the proceeds of sale (Van Huf- 
fel v. Harkelrode, 284 U. S. 225), and such power is 
particularly clear in this situation, where the Collector 
consented to such sale subject to the condition that his 
claim should have priority after payment of costs of ad- 
ministration. The consent of a lienholder to such a sale 
is of common occurrence (4 Collier on Bankruptcy (14th 
Ed.), 1606-1609), and under such circumstances it is usual 
for the lienholder to bear his share of the costs of ad- 
ministration. (4 Collier on Bankruptcy (14th Ed.), 234.) 

There is no merit to the appellant's final argument (Br. 
18-19) that under Section 67c of the Bankruptcy Act, ad- 
ministration costs and prior wage claims are jointly given 
priority over statutory liens, and if costs of administra- 
tion are to be given priority in payment over the tax 
claims of the Collector then wage claims must also be 
given the same priority. This argument ignores the fact 
that the decision below was based upon the agreement 
between the Collector and the receiver, and not upon the 
provisions of the statute. It is only just that the Collector 
should consent to the prior payment of costs of adminis- 
tration under the circumstances and the decision below 
merely gives effect to that agreement. Freeman Furniture 
Factories v. Bowlds, 136 F. (2d) 136 (C. C. A. 6th), 
cited by the appellant (Br. 18), is not to the contrary be- 
cause there there was no agreement similar to the agree- 
ment in this case and the case was decided strictly in ac- 
cordance with the provisions of the statute. 



—19— 

Conclusion. 

The decision of the court below is right. It is sup- 
ported by the facts and the law and should be affirmed. 

Respectfully submitted, 

Sewall Key, 
Acting Assistant Attorney General, 

A. F. Prescott, 
Fred E. Youngman, 

Special Assistants to the Attorney General. 

James M. Carter, 

United States Attorney, 

Loren P. Oakes, 

Special Attorney, Bureau of Internal Revenue. 



The foregoing brief is adopted and concurred in by the 
undersigned on behalf of the Appellee, Trustee. 

Martin Gendel, 
Attorney for Appellee, George T. Gog gin, Trustee in 
Bankruptcy of Estate of Kessco Engineering Cor- 
poration. 



APPENDIX. 

Bankruptcy Act 1898, c. 541, 30 Stat. 544, as amended 
by the Act of June 22, 1938, c. 575, 52 Stat. 840, Sec. 1 : 

Sec. 64. Debts Which Have Priority. — a. The 
debts to have priority, in advance of the payment of 
dividends to creditors, and to be paid in full out of 
bankrupt estates, and the order of payment, shall be 
(1) the actual and necessary costs and expenses of 
preserving the estate subsequent to filing the peti- 
tion; the filing fees paid by creditors in involuntary 
cases; where property of the bankrupt, transferred 
or concealed by him either before or after the filing 
of the petition, shall have been recovered for the 
benefit of the estate of the bankrupt by the efforts and 
at the cost and expense of one or more creditors, 
the reasonable costs and expenses of such recovery; 
the costs and expenses of administration, including 
the trustee's expenses in opposing the bankrupt's dis- 
charge, the fees and mileage payable to witnesses 
as now or hereafter provided by the laws of the 
United States, and one reasonable attorney's fee, for 
the professional services actually rendered, ir- 
respective of the number of attorneys employed, to 
the petitioning creditors in involuntary cases and to 
the bankrupt in voluntary and involuntary cases, as 
the court may allow; (2) wages, not to exceed v$600 
to each claimant, which have been earned within three 
months before the date of the commencement of the 
proceeding, due to workmen, servants, clerks, or 
traveling or city salesmen on salary or commission 
basis, whole or part time, whether or not selling ex- 
clusively for the bankrupt; * * * (4 ) taxes legally 



— 2— 

due and owing by the bankrupt to the United States 
or any State or any subdivision thereof * * *. 

JjC 3|C 5JC JjC 3|» Jj* 5(t Jj* 

(11 U. S. C. 1940 ed., Sec. 104.) 

Sec. 67. Liens and Fraudulent Transfers. — 
* * * 

j, *±* *A* xl* -1' *A» »i' »A* 

^p, ^. ^ ^ ^ "T* * *T* *** 

b. The provisions of section 60 of this Act to the 
contrary notwithstanding, statutory liens in favor of 
employees, contractors, mechanics, landlords, or other 
classes of persons, and statutory liens for taxes and 
debts owing to the United States or any State or sub- 
division thereof, created or recognized by the laws 
of the United States or of any State, may be valid 
against the trustee, even though arising or perfected 
while the debtor is insolvent and within four months 
prior to the filing of the petition in bankruptcy or of 
the original petition under chapter X, XI, XII, or 
XIII of this Act, by or against him. Where by such 
laws such liens are required to be perfected and arise 
but are not perfected before bankruptcy, they may 
nevertheless be valid, if perfected within the time per- 
mitted by and in accordance with the requirements of 
such laws, except that if such laws require the liens 
to be perfected by the seizure of property, they shall 
instead be perfected by riling notice thereof with the 
court. 

c. Where not enforced by sale before the filing of 
a petition in bankruptcy or of an original petition 
under chapter X, XI, XII, or XIII of this Act, 
though valid under subdivision b of this section, 



— 3— 

statutory liens, including liens for taxes or debts 
owing to the United States or to any State or subdi- 
vision thereof, on personal property not accompanied 
by possession of such property, and liens whether 
statutory or not, of distress for rent shall be postponed 
in payment to the debts specified in clauses (1) and 
(2) of subdivision a of section 64 of this Act, and, 
except as against other liens, such liens for wages or 
for rent shall be restricted in the amount of their 
payment to the same extent as provided for wages and 
rent respectively in subdivision a of section 64 of this 
Act. 

******** 

(11 U. S. C. 1940 eel., Sec. 107.) 



/' \fi / 



' ^SL^VUAA* 



w 



WLnittb States 



Circuit Court of Appeals 



Jfor tfje Jlmif) Circuit. 



FRANK R. CREEDON, Housing Expediter, Office 
of Housing Expediter, 

Appellant, 
vs. 

DOROTHY F. BORDERS, No. 11670 

MRS. A. C. SHALBERG, No. 11672 

MRS. RICHARD DAVIS, No. 11673 

ADOLPH NEUBERT, No. 11674 

L. R. CHAMBERS, No. 11675 

( i EORGE ROUSE, No. 11676 

HERMAN HAGE and EDWARD C. HAGE, No. 11677 

J. H. JEFFERS, d/b/a Norblad Hotel, No. 11678 

Appellees. 



transcript of JXecorb* 



Upon Appeals from the District Court of the United States 
for the District of Oregon 



Rotary Colorprint, 870 Brannan Street, San Francisco 



10-10-47—70 



(Bmtefc States 

Circuit Court of Appeals 



jfor tfje J^intf) Circuit. 



FRANK R. CREEDON, Housing Expediter, Office 
of Housing Expediter, 

Appellant, 

vs. 

DOROTHY F. BORDERS, No. 11670 

MRS. A. C. SHALBERG, No. 11672 

MRS. RICHARD DAVIS, No. 11673 

ADOLPH NEUBERT, No. 11674 

L. R. CHAMBERS, No. 11675 

GEORGE ROUSE, No. 11676 

HERMAN HAGE and EDWARD C. HAGE, No. 11677 

J. H. JEFFERS, d/b/a Norblad Hotel, No. 11678 

Appellees. 



transcript of Jkcorte 



Upon Appeals from the District Court of the United States 
for the District of Oregon 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record 
are printed literally in italic; and, likewise, cancelled matter appear- 
ing m the original certified record is printed and cancelled herein 
accordingly. When possible, an omission from the text is indicated by 
printing in italic the two words between which the omission seems to 
occur.] 

PAGE 

Certificate to Transcript: 

Borders No. 11670 30 

Shalberg No. 11672 39 

Davis No. 11673 47 

Neubert No. 11674 55 

Chambers No. 11675 63 

Rouse No. 11676 72 

Hage and Hage No. 11677 81 

Jeffers No. 11678 89 

Complaint for Injunction and Treble Damages 4 

Docket Entries: 

Borders No. 11670 30 

Shalberg No. 11672 38 

Davis No. 11673 47 

Neubert No. 11674 55 

Chambers No. 11675 63 

Rouse No. 11676 72 

Hage and Hage No. 11677 81 

Jeffers No. 11678 88 

Motion to Dismiss 10 

Motion to Dismiss: 

Borders No. 11670 10 

Rouse No. 11676 69 



ii Frank R. Creedon vs. 

INDEX PAGE 

Motion to Vacate Judgment and Reinstate Case 
on the Docket: 

Borders No. 11670 11 

Shalberg No. 11672 36 

Davis No. 11673 45 

Neubert No. 11674 53 

( !hambers No. 11675 61 

Rouse No. 11676 70 

Hage and Hage No. 11677 79 

Jeffers No. 11678 86 

Names and Addresses of Attorneys of Record: 

Borders No. 11670 3 

Shalberg No. 11672 35 

Davis No. 11673 43 

Neubert No. 11674 51 

Chambers No. 11675 59 

Rouse No. 11676 67 

Hage and Hage No. 11677 77 

Jeffers No. 11678 85 

Notice of Appeal : 

Borders No. 11670 29 

Shalberg No. 11672 38 

Davis No. 11673 46 

Neubert No. 11674 54 

Chambers No. 11675 62 

Rouse No. 11676 71 

Hage and Hage No. 11677 80 

Jeffers No. 11678 88 



Dorothy F. Borders, et at. iii 

ixdex PAGE 

Order Continuing Hearing on Motion to Dis- 
miss : 

Borders No. 11670 29 

Shalberg No. 11672 37 

Davis No. 11673 46 

Neubert No. 11674 54 

Chambers No. 11675 62 

Bouse No. 11676 71 

Hage and Hage No. 11677 80 

Jeffers No. 11678 87 

Order Concerning Printing Records of Eight 

Cases not Consolidated 95 

Order of Dismissal : 

Borders No. 11670 11 

Shalberg No. 11672 36 

Davis No. 11673 44 

Neubert No. 11674 52 

Chambers No. 11675 60 

Rouse No. 11676 68 

Hage and Hage No. 11677 79 

Jeffers No. 11678 86 

Order for Substitution of Party Appellant .... 94 

Statement of Points 93 

Statement of Points and Authorities Relied on 
by the Plaintiff in Support of His Motion to 
Judgment of Dismissal and Reinstate Cases 

on the Docket 12 

Stipulation 78 



No. 11670 

WLnittb States; 

Circuit Court of Sppeate 

Jfor tfje i^intf) Circuit 



FRANK R. CREEDON, Housing Expediter, 

Appellant, 

vs. 

DOROTHY F. BORDERS, 

Appellee. 



®ran*cript of &ecort» 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OP RECORD 

SYLVANUS SMITH, 

e/o Commercial Iron Works, 
Portland, Oregon. 

VICTOR E. HARR, 

Assistant United States Attorney, 
U. S. Court House, 
Portland, Oregon. 

C. E. KNOWLTON and 
JOHN E. HEDRICK, 

3312 White Building, 

Seattle, Washington, 

For Appellant. 

DELMORE LESSARD, 

Corbett Building, 
Portland, Oregon, 

For Appellee. 



4 Frank R. Creedon vs. 

In the District Court of the United States 
for the District of Oregon 

No. Civ. 3429 

PHILIP B. FLEMING, Administrator Office of 
Temporary Controls, 



Plaintiff, 



vs. 
DOROTHY F. BORDERS, 



Defendant. 



COMPLAINT FOR INJUNCTION AND 
TREBLE DAMAGES 

Comes Now the Plaintiff above named and al- 
leges : 

Count I. 

1. That the Office of Price Administration was 
duly created by Act of Congress pursuant to Sec- 
tion 201(a) of the Emergency Price Control Act 
of 1942, and amendments thereto; that by virtue of 
Executive Order 9809 (11 F.R. 14,281), issued by the 
President of the United States on December 12, 
1946, Philip B. Felming is the duly appointed, 
qualified, and acting Administrator of the Office 
of Temporary Controls and has been invested with 
all the functions of the Administrator of the Office 
of Price Administration. 

2. That jurisdiction of this action is conferred 
upon this court by Section 205(a), Section 205(c), 
and Section 205(e) of the Act, as amended. 



Dorothy F. B s 5 

That tlu j defendant. 1 ! y K. Borders, 

b og 1 1817 N. E. Weidler Street, Portland, Ore- 
_ n. at all times hereinafter mentioned, has been the 
landlord ai peratoi housing accommodations 
at the address, within the jurisdicti 

this art, and during all of said times has rented 
1 offered for rent housing as at said 

address. 

4. That in the judgment of said Administrat 
the defendant engaged in acts and practices which 

ostitute a violation of S< stion 4(a) of the Emer- 
E ncy Pria I introl A *A 1942 as amended (50 

U.S.C.A. 901 e< si . . hereinafter referred to as 
"the Act," in that the defendant has violated the 
Bent Regulation for Housing CIO F.R. 13528) is- 
sued in accordance with the provisions of Section 
2 of the Act; and. theref« ursuant to Section 

_ 5 a) of the Act, the Administrator es to ti 

r the injuncti - and orders hereinafter & I 
forth to enforce compliance with said Section 4(a) 
of said Act 

That at all times mentioned herein since July 
1. 1942. there has been and is now in effect the Rent 
Regulation for Housing issued pursuant to Section 
2 of the Act r the Portland-Vancouver De- 
fense-Rental Area (10 F.R. 13528 establishing reg- 
olal sions f or the use and i ancy 

housing accommodations within the Portland-Van- 
- -Rental Area. 

6. Th; * - ; Bent Reg I i I ! s . • 

— S< etion 4 thereof, maximum rents for O 



6 Frank R. Creedon vs. 

use and occupancy of housing accommodations 
within the Portland-Vancouver Defense-Rental 
Area and by Section 2(a) thereof prohibits the de- 
mand or receipt of rents higher than said established 
maximum rents. 

7. That on or about February 6, 1946, the Area 
Rent Director of the Portland- Vancouver Defense 
Rental Area, pursuant to Section 5(c) (i) and Sec- 
tion 4(e) of the Housing Rent Regulation, issued 
orders decreasing maximum rent, effective July 1, 
1942, for apartment 1 within housing accommoda- 
tions located at 1817 N. E. Weidler Street, Portland, 
Oregon; that defendant has refused to reduce the 
rental for such apartment or to make refunds of 
excess rent collected prior to the date of issuance of 
the aforesaid order. 

8. That more than thirty (30) days has elapsed 
since the occurrence of the aforesaid overcharges; 
that the tenant so overcharged has not instituted any 
actions for damages on account of said overcharge 
within thirty (30) days from the date thereof, pur- 
suant to Section 205(e) of the Emergency Price 
Control Act, as amended and extended. 

Count II. 

1. Plaintiff re-alleges and incorporates here in 
Paragraphs one, two, three, four, five, six and eight 
of Count I as fully as though set forth herein. 

2. That on or about February 6, 1946, the Area 
Rent Director of the Portland- Vancouver Defense- 
Rental Area, pursuant to Section 5(c) (i) and Sec- 



Dorothy F, Borders 7 

tion 4(e) of the Housing Rent Regulation, issued 
orders decreasing maximum rent, effective July 1, 
1942, for apartment 2 within housing accommoda- 
tions located at 1817 N. E. Weidler Street, Portland, 
Oregon; that defendant lias refused to reduce the 
rental for such apartment or to make refunds of ex- 
cess rent collected prior to the date of issuance of 
the aforesaid order. 

Count III. 

1. Plaintiff re-alleges and incorporated herein 
Paragraphs one, two, three, four, five, six and eight 
of Count I as fully as though set forth herein. 

2. That on or about February 6, 1946, the Area 
Rent Director of the Portland- Vancouver Defense- 
Rental Area, pursuant to Section 5(c) (i) and 
Section 4(e) of the Housing Rent Regulation, issued 
orders decreasing maximum rent, effective July 1, 
1942, for apartment 3 within Housing accommo- 
dations located at 1817 N. E. Weidler Street, Port- 
land, Oregon; that defendant has refused to reduce 
the rental for such apartment or to make refunds 
of excess rent collected prior to the date of issuance 
of the aforesaid order. 

Count IV. 

1. Plaintiff re-alleges and incorporates herein 
Paragraphs one, two. three, four, five, six and eight 
of Count I as fully as though set forth herein. 

2. That on or about February 6, 1946, the Area 
Rent Director of the Portland- Vancouver Defense- 



8 Frank R. Creadon vs. 

Rental Area, pursuant to Section 5(c) (i) and Sec- 
tion 4(e) of the Housing Rent Regulation, issued 
orders decreasing maximum rent, effective July 1, 
1942, for apartment 4 within housing accommoda- 
tions located at 1817 N. E. Weidler Street, Port- 
land, Oregon; that defendant has refused to reduce 
the rental for such apartment or to make refunds 
of excess rent collected prior to the date of issuance 
of the aforesaid order. 

Count V. 

1. Plaintiff re-alleges and incorporates herein 
Paragraphs one, two, three, four, five, six and eight 
of Count I as fully as though set forth herein. 

2. That on or about February 6, 1946, the Area 
Rent Director of the Portland- Vancouver Defense- 
Rental Area, pursuant to Section 5(c) (i) and Sec- 
tion 4(e) of the Housing Rent Regulation, issued 
orders decreasing maximum rent, effective July 1, 
1942, for apartment 5 within housing accommoda- 
tions located at 1817 N. E. Weidler Street, Port- 
land, Oregon; that defendant has refused to reduce 
the rental for such apartment or to make refunds 
of excess rent collected prior to the date of issuance 
of the aforesaid order. 

Wherefore, the plaintiff demands: 

1. A preliminary and final injunction enjoining 
the defendant, his agents, servants, employees and 
all persons in active concert or participation with 
him from directly or indirectly demanding or re- 
ceiving for accommodations subject to said Rent 



Dorotlt// F. Borders 9 

Regulation for Housing rents in excess of the maxi- 
mum rent permitted by said regulation as heretofore 
or hereafter amended or extended, or in excess of 
the maximum rent established by any other regula- 
tion relating to rents issued pursuant to the Emer- 
gency Price Control Act of 1942, as heretofore or 
hereafter amended or extended. 

2. An Order directing said defendant to deliver 
to plaintiff's attorney of record certified checks pay- 
able to any and all tenants overcharged, in the 
amount of the overcharges established herein. 

3. Judgment for the plaintiff on behalf of the 
United States of America and against the defendant 
in the amount of three times the established over- 
charges, less any payment to tenants as a result of 
the Order of the Court as prayed for in paragraph 
two above in the prayer. 

4. The costs of the action expended herein. 

5. Such other Order enforcing compliance with 
Section 4 of the Act and such further and different 
relief as the Court may deem just and proper. 

Dated this 28 dav of January, 1947. 

/s/ SYLVANUS SMITH, 
/s/ VICTOR E. HARR, 

Assistant IT. S. Attorney. 

[Endorsed] : Filed Jan. 28, 1947. 



10 Frank R. Creedon vs. 

[Title of District Court and Cause.] 

MOTION TO DISMISS 

Comes now the defendant, Dorothy F. Borders, 
through and by her attorney, Dellmore Lessard, and 
moves the Court for an order dismissing the com- 
plaint of the plaintiff on file herein upon the follow- 
ing grounds: 

(a) That plaintiff has no legal capacity to sue. 

(b) That said complaint does not state facts 
sufficient to constitute a suit against this defendant 
in that it appears on the face of said complaint that 
plaintiff's cause of suit is founded upon the Emer- 
gency Price Control Act of 1942, which said Act 
expired on June 30, 1946. 

(c) That said complaint does not state facts 
sufficient to cause a suit against the defendant in 
that it appears on the face of said complaint that 
plaintiff's cause of suit is founded upon the Price 
Control Act of 1942 as amended and extended, and 
said Act is unconstitutional and void for the reason 
that said Act is in violation of the 5th Amendment 
to the Constitution of the United States, and also 
for the reason that said act pretends to assume 
power in behalf of the United States Government 
which is reserved by the Constitution to the states 
or to the people. 



Dorothy F. Borders 11 

Dated at Portland, Oregon, this 19th day of Feb- 
ruary, 1947. 

/s/ DELLMORE LESSARD, 

Attorney for Defendant. 

A true copy mailed Sylvanus Smith, OPA attor- 
ney, Feb. 19, 1947. 

[Endorsed] : Filed Feb. 21, 1947. 



[Title of District Court and Cause.] 

ORDER OF DISMISSAL 

Now at this dav It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 
March 6, 1947. 



[Title of District Court and Cause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the plaintiff above named and re- 
spectfully moves the Court to vacate the judgment 
and dismissal entered in the above case and to rein- 
state the case on the docket. 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, Jr., 
/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed]: Filed May 17, 1947. 



12 



Frank R. Creedon vs. 



In the District, Court of the United States 
for the District of Oregon 

PHILIB B. FLEMING, Administrator, 
Office of Temporary Controls, 

Plaintiff, 

vs. 



A. C. SHALBERG, 

ADOLPH NEUBERT, 

DOROTHY F. BORDERS, 

L. R. CHAMBERS, 

GEORGE ROUSE, 

HERMAN HAGE and 
EDWARD O. HAGE, 

J. H. JEFFERS, d/b/a 
NORBLAD HOTEL, 

MRS. RICHARD DAVIS, 



No. 3430 
No. 3435 
No. 3429 
No. 3462 
No. 3463 

No. 3464 

No. 3465 
No. 3431 



Defendants. 



STATEMENT OF POINTS AND AUTHORI- 
TIES RELIED ON BY THE PLAINTIFF 
IN SUPPORT OF HIS MOTION TO VA- 
CATE JUDGMENT OF DISMISSAL AND 
REINSTATE CASES ON THE DOCKET 

Each of these cases was dismissed by this Hon- 
orable Court on the 6th day of March, 1947. Since 
that time there have been certain decisions which the 
plaintiff desires to bring before this Court which the 



Durolhji F. Borders L3 

plaint iff believes may convince the Court that it 
has jurisdiction in these matters, and that there- 
fore, these cases should he reinstated on the docket 
and the judgment of dismissal vacated. 

The question of the right of Mr. Fleming to be 
substituted or to commence action, the latter ques- 
tion which involves the same difficulties in regard 
to cases brought pursuant to the Emergency Price 
Control Act of 1942, as amended, and Executive 
Order No. 9809, has received the attention of sev- 
eral courts throughout the country. Substitutions 
of the validity of the commencement of these actions 
has been allowed in every Circuit, including the 9th, 
and a vast number of Districts throughout the coun- 
try, without the writing of a formal published opin- 
ion. To the best of this writer's knowledge and after 
an exhaustive search, to date the question has been 
decided in written opinions by the following courts 
in the following cases: 

Bowles v. Ell-Carr Company, Inc., ano. (Civil 
33-668) by Judge Caffee of the Southern 
District of New York, on March 19, 1947. 

Porter v. American Distilling Company, Inc., 
by Judge D. J. Bright, also of the Southern 
District of New York. 

Porter v. Bowers, District Court of the West- 
ern District of Missouri. 

Fleming v. Mohawk W recking Company by 
Justice Douglas of the United States Su- 
preme Court on April 28, 1947. 



14 Frank R. Creedon vs. 

All of the above cited cases were in favor of the 
substitution of Fleming for Porter. 

Contrary opinion has been held by the District 
Court of Hawaii, in 

Porter v. Hirahara, 60 F. supp. 441, decided 
January 19th by Judge McLaughlin, 

and by the District Court of Oregon, in 
Porter v. Ryan, 69 Fed. 446, 

and by Judge DeVries of the California Municipal 
Court in Long Beach on January 30, 1947, in 
Porter v. Johnson. 

It is realized by the plaintiff that none of the Dis- 
trict Court authorities cited is binding on this court. 
However, the plantiff would like to quote the lan- 
guage of one of these District Courts as being at 
least persuasive. The District Court of New York 
in the American Distilling Company case (supra) 
after discussing the question of substantial need 
(which we are not concerned with here as all of 
these cases were originally brought in Fleming's 
name) the Court at length expounded on the vari- 
ous objections raised by the defendant in opposi- 
tion to the plaintiff's Motion for Substitution. 

" However, say the defendants, neither the 
Office of Administrator nor the Office of Price 
Administration has been abolished, and there 
can be no successor; that the statutory au- 
thorities cited by the President in the first para- 
graph of Executive Order 9809 as justifying 
his action do not help; the Office of Price Ad- 



Do rot In/ F. Borders 13 

ministrator is still vacant, Fleming's appoint- 
ment is as the head of a new agency, and Sec. 
201(b) of the Emergency Price Control Act 
(which defendants contend is the only section 
under which the President might otherwise pro- 
ceed in the instant case) has not been complied 
with, in that the functions of the Office of Price 
Administrator have not been transferred 'to 
any other department or agency of the Govern- 
ment having other functions relating to' the 
commodity or commodities over which the 
O.P.A. has exercised jurisdiction. This is par- 
ticularly so, it is argued, because prior to De- 
cember 12, 19-L6, when Porter resigned, the Of- 
fice of Temporary Controls did not exist, and, 
therefore, did not have any functions then ex- 
ercised bv the OPA. 

Let us examine the authorities cited in the Order. 
Title I of the First War Powers Act of De- 
cember 18, 1941, is found in 50 U.S.C. App. 
Sees. 601-605. By Sec. 601 the President is au- 
thorized by Congress 'to make such redistribu- 
tion of functions among executive agencies as he 
may deem necessary, including any functions, 
duties and powers hitherto by law T conferred 
upon any executive department commission, 
bureau, agency, governmental corporation, 
office, or officer, in such manner as in his judg- 
ment shall seem best fitted to carry out the pur- 
poses of this title, and to this end is authorized 
to make such regulations and to issue such or- 



16 Frank R. Creedon vs. 

ders as he may deem necessary * * *. Provided 
further That the authority by this title granted 
shall be exercised only in matters relating to the 
conduct of the present war." 

By Sec. 602 the President was authorized to util- 
ize, coordinate or consolidate any executive or ad- 
ministrative commissions, bureaus, agencies, office or 
officers then existing by law and to transfer any du- 
ties or powers from one existing department, agency, 
office or officer to another. 

It has been held that, under the. wording of Sec. 
601, the powers conferred upon the President to 
transfer functions was intended to extend to any 
and all functions, whether existing before or after 
the passage of the First War Powers Act ; and this 
was in a case where the right of the President act- 
ing under that section, enacted in December, 1941, 
was questioned in transferring by executive order 
the right to approve maximum price regulations con- 
ferred upon the Secretary of Agriculture by Sec. 
3(e) of the Emergency Price Control Act, enacted 
in January, 1942, to the War Food Administration. 
California Lima Bean Growers Assn. v. Bowles, 150 
F. (2) 964-966. 

While Sec. 601 does not specifically state that new 
agencies may be created which will consolidate func- 
tions of other agencies, the statute has been con- 
strued as authorizing such action. The functions 
of the Federal Housing Administration, Federal 
Home Loan Bank Board, Home Owners Loan Cor- 
poration, Federal Savings and Loan Insurance Com- 



Dorothy F. Borders 17 

pany, and the United States Housing Authority 
were consolidated in the National Housing Agency. 
(Ex. Order 9070, 7 F.R. 1529, Feb. 24, 1942); and 
later the War Food Administration was created to 
include many agencies relating to food (Ex. Or- 
ders 9322, of March 26, 1943, amended by Ex. Or- 
der 9334 of April 19, 1943; Code of Fed. Reg., Cum. 
SuppL, Titles 1-3, pgs. 1262, 1293. See also Ex- 
ecutive Order 9347 (8 F.R. 7207) consolidating May 
27, 1943, other agencies in the Office of War Mobili- 
zation; Executive Order 9361 (8 F.R. 2071) in the 
Office of Economic Warfare on July 15, 1943; and 
in the Surplus War Property Administration on 
Feb. 19, 1944, by Order 9425 (9 F.R. 2071). This 
construction by the Executive, it is settled, is enti- 
tled to persuasive weight. Billings v. Truesdell, 321 
U.S. 542-552. And Congress has appropriated funds 
for the use of these agencies, indicating its acqui- 
escence in such construction, particularly where, 
with knowledge, it fails to amend the Act. 
Brooks v. Dewar, 313 U. S. 354, 361. 

It is argued that the word " executive'" as used 
in Sec. 601 has some special meaning, and must be 
distinguished from agencies created by Congres- 
sional Act, as in the Emergency Price Control Act. 
I cannot see that the word "executive" as used 
means anything more than a bureau, commission or 
agency created to exercise executive duties. The 
section does not attempt to distinguish a body or of- 
fice erected by executive order from one erected by 
Congressional enactment. As a matter of fact, the 



18 Frank /?. Creed on vs. 

power to create any agency or office given to the 
President, is conferred by Congressional Act, and 
there would seem to he no logical distinction be- 
tween any agency established bv Congress bv an 
Act and an agency established by Congress through 
an Act delegating to the President the Congressional 
power to establish such agency. And the multitude 
of words used in Sec. 601 — "including" functions, 
duties and powers conferred upon any " executive 
department, commission, bureau, agency, govern- 
mental corporation, office or officer" — shows a much 
more comprehensive construction than the definition 
to which defendants seek to limit "executive." 
United States v. Paramount Publix Corpo- 
ration, 73 F. (2) 103. 

It has been said that the court must not hunt for 
limitations or scrutinize the wording with a con- 
fining intent, but should seek for the purpose and 
spirit of the enactment. United States v. Kussell- 
Taylor, Inc., 64 P. Supp. 748-752. 

It would not be amiss, in this connection, to call 
attention to Sec. 133y-5 of the Reorganization Act 
of 1942 (5 U.S.C.A. Sec. 133y et seq) in which 
"agency" is defined as meaning "any executive 
department, commission, independent establishment, 
corporation * * * board, bureau, division, service, 
office, officer, authority, administration, or other 
establishment, in the executive branch of the Govern- 
ment. Such term does not include the Comptroller 
General of the United States or the General Account- 



Dorothy F. Borders 19 

ing Office, which are part of the legislative branch of 
the Government." That clearly indicates that the 
agencies mentioned, which are charged with regula- 
tory functions, are executive agencies and a part of 
the executive branch of the government. 

Part III of the Second War Powers Act of 1942 
became effective March 27, 1942, and is found in 50 
T.S. App. Sec. 633, but would seem to have no ap- 
plication to the present dispute. 

Section 201 (b) of the Emergency Price Control 
Act of 1942 became effective January 30, 1942, and 
is found in 50 U.S.C.A. App. Sec. 921. By that sec- 
tion, the President is authorized to transfer any of 
the powders and functions conferred by the Act upon 
the Office of Price Administration "with respect to 
a particular commodity or commodities to any other 
department or agency of the Government having 
other functions relating to such commodity or com- 
modities' ' except powers or functions conferred by 
law upon the Secretary of Agriculture, or with 
respect to any agricultural commodity (which dis- 
tilled spirits is not, Dowling Bros. Distilling Co. v. 
United States, 153 F. (2) 353), except powers and 
functions relating to priorities and rationing. 

As to this, it is urged that no authority is con- 
ferred except to transfer functions to another 
agency which already has functions relating to a 
particular commodity then administered by the 
Price Administrator. 

The construction sought to be placed seems in- 
admissible. Simultaneously with the transfer of 
functions of the Temporary Controls Administrator, 
there was created the Office of Temporary Controls 



20 Frank R. Creedon vs. 

to take over the functions of the OPA and other 
agencies. There was thus an " agency of the Gov- 
ernment having other functions relating to such 
commodity.' And the new agency is a part of the 
Office for Emergency Management of the President, 
established pursuant to the Reorganization Act of 
1939 (5 U.S.C., Sec. 133 et seq.; particularly Sec. 
133s effectuating Plan I following Sec. 133t) and 
responsible for over-all direction of price control, 
certainly a function relating; to commodities. See 
Ex. Order 8248,-1, September 8, 1939, Code of Fed. 
Regulations, Cum. Suppl. Title 1-3, page 576; Ad- 
ministrative Order May 25, 1940 ; id. page 1320 ; Ex. 
Order 9250, of Oct. 3, 1942, id ; page 1213. 

Section 2 of the Stabilization Act of 1942, ef- 
fective October 2, 1942, mav be found in 50 U.S.C.A. 
App. Sec. 962. It does not seem to have any appli- 
cation to the situation here presented. 

It is next asserted that Fleming cannot be the 
successor of Porter because under Sec. 201(a) of 
the Emergency Price Control Act of 1942 (50 
U.S.C.A. App. Sec. 921(a), the Price Administrator 
can only be appointed by the President "with the 
advice and consent of the Senate"; and Fleming's 
appointment has never been confirmed by the Sen- 
ate; citing Porter v. Hirahara and Porter v. Ryan, 
supra. 

By that section the Office of Price Administra- 
tion is created, to be under the direction of a Price 
Administrator, "appointed by the President, by and 
with the advice and consent of the Senate." But as 
shown before, any of the powers and functions con- 



Dorothy F. Borders 21 

ferred upon the Office of Price 4 Administration with 
respect to a commodity or commodities may be 
transferred by the President "to any other depart- 
ment or agency of the Government having other 
functions relating to such commodity or commodi- 
ties." 

No statute is mentioned that the appointment of 
Fleming as Temporary Control Administrator must 
be continued by the Senate. He has not been ap- 
pointed Administrator of the Office of Price Ad- 
ministration. He is not appointed Administrator 
solely of OPA functions; his duties comprehend 
much more. And the agency of which he has been 
appointed Administrator has "other functions re- 
lating to such commodity or commodities" as de- 
scribed above. This sentence does not refer solely 
to existing departments or agencies, nor limit the 
power to transfer to them. It was undoubtedly con- 
templated that changing conditions would require 
or suggest a shifting or consolidation or functions, 
and this was to be permitted except with reference 
to certain powers or functions of the Secretary of 
Agriculture. 

Certainly Mr. Fleming, as Administrator, can 
bring action now for violation of the regulations of 
OPA by over ceiling sales, were such action not 
otherwise barred. If he can sue, he can be substi- 
tuted in a pending action. 

If the President had usurped legislative power 
by Executive Order 9809, Congress would certainly 
have known it and remonstrated. But, to the con- 
trary, after Mr. Fleming's appointment, he testified 



22 Frank B. Creedon vs. 

before the House sub-committee on Appropriations 
on the Presidential request for a deficiency appro- 
priation, and there was no objection either then or 
in the subsequent bill passed by the Senate on March 
5, 1947, and now Public Law 20, 80th Cong., 1st Ses- 
sion, which specifically refers to the transfer of the 
functions of OPA to the Office of. Temporary Con- 
trols by Executive Order 9809, and thus, I think, 
ratifies the President's action. Isbrandtsen-Moller 
Co. v. United States, 300 U. S. 139. 147; Swayne 
& Hoyt, Ltd. vs. United States, id. 297, 301. 

Reading section 921 (b) of the Emergency Price 
Control Act with section 601 of the First War Pow- 
ers Act, as I think they must be, I can see no valid 
objection to Mr. Fleming acting as Temporary Con- 
trol Administrator in the maintenance and further 
prosecution of this action, as the President directs in 
paragraph 2 of Executive Order 9809. 

Even the termination of the Emergency Price 
Control Act would not abate rights vested or lia- 
bilities incurred prior thereto. Sec. 901. 

Finally, it is asserted that because the OPA has 
not been abolished, no one can be designated to con- 
tinue pending suits by other than Congress, it has 
not acted in that respect, or authorized the Presi- 
dent to take its place by designating a new agency 
for that purpose; and Executive Order No. 9809, is 
attempting to accomplish that result is invalid. 

The argument here is substantially a reiteration 
of that previously referred to. If my answer is 
sound, that the President acted within his powers 
in erecting the Office of Temporary Controls, with 



Dorothy F. Borders 23 

Mr. Fleming as Administrator, there does not seem 
to be any objection to conferring upon such Admin- 
istrator, who is to exercise the consolidated functions 
of the several agencies, the power to continue pend- 
ing litigation." 

And this court concluded "In doing this simple 
thing, the Constitution has not been validated or 
weakened. Congress has not been by-passed, the 
law is still enforced and the violator is held to an- 
swer." 

Regardless of the status of this question hereto- 
fore, any question or any doubt raised by the de- 
cisions of the District Courts of Oregon or Ha- 
waii or the Municipal Court of Long Beach would 
seem to be resolved by the decision of Justice Doug- 
las of the Supreme Court in Fleming v. Mohawk 
Wrecking Company, No. 583, which the plaintiff re- 
spectfully submits, is binding on this Court. This 
case was on appeal before the Supreme Court at the 
time of Administrator Porter's resignation. On Mo- 
tion of the Acting Solicitor General a Motion for 
Substitution of Fleming was allowed. Thereafter 
the defendant filed a Motion to vacate the order 
substituting Fleming, which was briefed and ar- 
gued at length before that Court. The Court first 
reviewed the history of the Emergency Price Con- 
trol Act as enacted in 1946, the subsequent decon- 
trol of most of the commodities controlled thereby, 
and the creation of the Office of Temporary Controls 
by Executive Order in December, 1946, and discuss- 
ing the objections as raised by the defendant in the 
following language: 



24 Frank R. Creedon vs. 

kt It is argued that the President had no authority 
to transfer the functions of the Price Administrator 
to another agency and to vest in an officer appointed 
by the President the power which the Emergency 
Price Control Act, Sec. 201, had conferred upon 
an Administrator appointed by the President by and 
with the advice and consent of the Senate, and it is 
said that even though such authority existed, it 
came to an end with the cessation of hostilities. 

By Sec. 1 of the First War Powers Act of 1941, 
55 Stat. 838, 50 U.S.C.A. App. Supp. v. Sec. 601, 
the President is 

4 'authorized to make such redistribution of 
functions among executive agencies as he may 
deem necessary, including any functions, du- 
ties, and powers hitherto by law conferred upon 
any executive department, commission, bureau, 
agency, governmental corporation, office, or of- 
ficer, in such manner as in his judgment shall 
seem best fitted to carry out the purposes of 
this title, and to this end is authorized to make 
such regulations and to issue such orders as he 
may deem necessary* * *." 

That power may be exercised "only in matters re- 
lating to the conduct of the present war." Sec. 1, 
and expires six months after "the termination of 
the war." Sec. 401. 

On December 31, 194(). after the creation of the 

Office of Temporary Controls, the President, while 

icognizing that k 'a state of war still exists," by 



Dorothy F. Borders 25 

proclamation declared that hostilities had termi- 
nated. The cessation of hostilities does not neces- 
sarily end the war power. Tt was stated in Hamil- 
ton v. Kentucky Distilleries & W. Co., 251 U.S. 146, 
161, that the war power includes the power "to rem- 
edy the evils which have arisen from its rise and 
progress" and continues during that emergency. 
Stewart v. Kahn, 11 Wall. 493, 507. Whatever may 
he the reach of that power, it is plainly adequate 
to deal with problems of law enforcement whicn 
arise during the period of hostilities but do not cease 
with them. No more is involved here. 

Section 1 of the First War Powers Act does not 
explicitly provide for creation of a new agency 
which consolidates the functions and powers pre- 
viously exercised by one or more other agencies. 
But the Act has been repeatedly construed by the 
President to confer such authority. Such construc- 
tion by the Chief Executive, being both contempo- 
raneous and consistent, is entitled to great weight. 
See United States v. Jackson. 280 U.S. 183, 193; Bill- 
ings v. Truesdell, 321 U.S. 542, 552-553, and the 
appropriation by Congress of funds for the use of 
such agencies stands as confirmation and ratification 
of the action of the Chief Executive. Brooks v. 
Dewar, 313 U.S. 354, 361. 

Nor do w r e think there is merit in the contention 
that the First War Powers Act gave the President 
authority to transfer functions only from agencies 
in existence when that Act became law. It is true 
that Sec. 1 authorizes the President "to make such 



26 Frank R. Creedon vs. 

redistribution of functions among executive agen- 
cies as he may deem necessary, including any func- 
tions, duties, and powers hitherto by law conferred 
upon" any agency. But the latter clause is only an 
illustration of the authority granted, not a limitation 
on it. It makes clear that the authority extends to 
existing agencies as well as to others. That construc- 
tion is supported by Sec. 5 of the Act which states 
that upon its termination all executive and admin- 
istrative agencies "shall exercise the same functions, 
duties, and powers as heretofore or as hereafter 
by law may be provided, any authorization of 
the President under this title to the contrary not- 
withstanding. " As stated by the Emergency Court 
of Appeals, unless Sec. 1 authorizes the President 
to redistribute functions of agencies created after 
the passage of the Act, the reference in Sec. 5 to 
functions "hereafter" provided by law is "Wholly 
meaningless." California Lima Bean Growers 
Ass'n. v. Bowles. 150 F. 2d 964, 967. Nor is that re- 
sult affected by the subsequent enactment of the 
Emergency Price Control Act which in Sec. 201 
(b) authorized the President to transfer any of 
the powers and functions of the Office of Price Ad- 
ministration "with respect to a particular commod- 
ity or commodities" to any government agency hav- 
ing other functions relating to such commodities. 
Whatever effect that provision may have, it does 
not purport to deal with general enforcement func- 
tions and so restricts in no way the authority of the 
President under the First War Powers Act to trans- 



Dorothy F. Borders 27 

Per them. Yet enforcement functions are all that are 
involved in the present cases. 

We need not decide whether under the First War 
Powers Act the President had authority to transfer 
functions of an officer who need be confirmed by the 
Senate to one appointed by the President without 
Senate confirmation. For Sec. 2 of the Act provides : 

"That in carrying out the purposes of this title, 
the President is authorized to utilize, coordinate, or 
consolidate any executive or administrative com- 
missions, bureaus, agencies, governmental corpora- 
tions, offices, or officers now existing by law, to trans- 
fer any duties or powers from one existing depart- 
ment, commission, bureau, agency, governmental 
corporation, office, or officer to another, to transfer 
the personnel thereof or any part of it either by de- 
tail or assignment, together with the whole or any 
part of the records and public property belonging 
thereto." 

The authority to "utilize * * * offices, or officers 
now existing by law ,: is sufficient to sustain the 
transfer of functions under the Executive Order 
from Porter, resigned, to Fleming. For prior to 
the Act, Fleming had been appointed from the Pres- 
ident and confirmed bv the Senate as Federal Works 
Administrator. He thus was the incumbent of an 
office "existing by law" at the time of the passage 
of the Act and by virtue of Sec. 2 could be the law- 
ful recipient through transfer by the President of 
the functions of other agencies as well. To hold thai 
an officer, previously confirmed by the Senate, musl 



23 Frank B.Cn edon vs. 

be once more confirmed in order to exercise the 
powers transferred to him by the President would 
be quite inconsistent with the broad grant of power 
given the President by the First War Powers Act. 
Any doubts on this score would, moreover, be re- 
moved by the n mition by Congress in a recent 
appropriation of the status of the Temporary Con- 
trols Administrator. That recognition was an ac- 
ceptance or ratification by Congress of the Presi- 
dent's rtion in Executive Order No. 9809. Swayne 
& Hoyt. Ltd. v. United States. 300 U.S. 297. 301-302: 
Brooks v. Dewar, supra." 

It might he remarked that this decision of the 
United States Supreme Court as written by Justice 
Douglas as regards to this point was the unanimous 
decision of the Court. 

Respectfully submitted. 

/s/ C. E. KXOWLTOX. JR., 
/s/ JOHX E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed] : Filed May 17. 1947. 



Dorothy F. Border* 29 

Xo. Civil 3429 

PHILIP 13. FLEMING, Administrator Office of 
Temporary Controls. 



Plaintiff, 



vs. 
DOROTHY F. BORDERS, 



Defendant. 



ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this day It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

May 22, 1947. 



[Title of District Court and Cause.] 

NOTICE OF APPEAL 

Notice is hereby given that Philip B. Fleming, 
Administrator of the Office of Temporary Controls, 
the plaintiff named above, hereby appeals to the Cir- 
cuit Court of Appeals for the Ninth Circuit, from 
the Order dismissing plaintiff's Complaint entered 
in this action March 6, 1947. 

/s/ JOHN E. HEDRICK, 

/s/ CHARLES E. KNOWLTON, Jr., 

Attornevs for Plaintiff. 

■ 

[Endorsed] : Filed June 5, 1947. 



30 Frank R. Creedon vs. 

[Title of Cause.] 

DOCKET ENTRIES 

1947 

Jan. 28 Filed complaint for injunction and treble 
damages. 

Jan. 28 Issued summons — to Marshal. 

Feb. 4 Filed summons with Marshal's return. 

Feb. 21 Filed motion to dismiss. 

Mar. 6 Entered order dismissing for want of 
prosecution. 

May 17 Filed motion to vacate judgment and re- 
instate ease on docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entered order continuing motion to va- 
cate judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record. 



In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the District Court 
of the United States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 
from 1 to 24. inclusive, constitute the transcript of 
record on appeal from a judgment of said court in 
a cause therein numbered Civil 3429, in which Philip 
B. Fleming. Administrator, Office of Temporary 
Controls, is plaintiff and appellant, and Dorothy 



Dorothy F. Borders 31 

F. Borders is defendant and appellee; that the 
said transcript has been prepared by me in ac- 
cordance with the designation of the contents of 
the record on appeal filed by the appellant, and in 
accordance with the rules of this court; that I have 
compared the foregoing transcript with the original 
record thereof and that it is a full, true and cor- 
rect transcript of the record and proceedings had in 
said court in said cause, in accordance with the said 
designation as the same appears of record and on 
file at my office and in my custody. 

In Testimony Whereof I have hereunto set my 
hand and affixed the seal of said court in Portland, 
in said District, this 26th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. 



[Endorsed]: No. 11670. United States Circuit 
Court of Appeals for the Ninth Circuit. Frank R. 
Creedon, Housing Expediter, Appellant, vs. Doro- 
thy F. Borders, Appellee. Transcript of Record. 
Upon Appeal from the District Court of the United 
States for the District of Oregon. 

Filed June 28, 1947. 

/s/ PAUL P. O'BRIEN, 
Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 11672 

(Hmtefc States 

Circuit Court of Appeals 

Jfor tfjc J?intf) Circuit. 



FRANK R. CREEDON, Housing Expediter, 

Appellant, 
vs. 

MRS. A. C. SHALBERG, 

Appellee. 



{Krangcript of Jkcorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OF RECORD 

SYLVANUS SMITH, 

Commercial Iron Works; 

VICTOR E. HARR, 

Assistant United States Attorney, 

U. S. Court House, Portland, Oregon; 

C. E. KNOWLTON, JR., and 

JOHN E. HEDRICK, 
3312 White Building, 
Seattle 1, Washington, 
For Appellant. 

No record of attorney for Appellee. 



36 Frank R. Creedon vs. 

In the District Court of the United States 
for the District of Oregon 

No. Civil 3430 

PHILIP B. FLEMING, Administrator Office of 
Temporary Controls, 

Plaintiff, 

vs. 

MRS. A. C. SHALBERG, 

Defendant. 

COMPLAINT 

[Complaint for Injunction and Treble Dam- 
ages is similar to the same as set out in com- 
panion cause No. 11670 on pages 4 to 9.] 



[Title of District Court and Cause.] 

ORDER OF DISMISSAL 

Now at this day It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 

March 6, 1947. 



[Title of District Court and Cause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the above plaintiff and respectfully 
moves the Court to vacate the judgment and dis- 
missal entered in the above case and to reinstate the 
case on the docket. 



Mrs. A. C. Shalberg 37 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, JR., 

/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed] : Filed May 17, 1947. 



[Statement of Points and Authorities Relied 
on by the Plaintiff in Support of His Motion to 
Vacate Judgment of Dismissal and Reinstate 
Cases on the Docket is similar to the same as set 
out in companion cause No. 11670 on pages 12 
to 28.] 



[Title of District Court and Cause.] 

ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this day It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

May 22, 1947. 



38 Frank R. Creedon vs. 

[Title of District Court and Cause.] 

NOTICE OF APPEAL 
Notice is hereby given that Philip B. Fleming, 
Administrator of the Office of Temporary Controls, 
the plaintiff named above, hereby appeals to the 
Circuit Court of Appeals for the Ninth Circuit, 
from the Order dismissing plaintiff's Complaint en- 
tered in this action on March 6, 1947. 

/s/ JOHN E. HEDRICK, 
/s/ CHARLES E. KNOWLTON, 
JR., 

Attorneys for Plaintiff. 

[Endorsed] : Filed June 5, 1947. 



[Title of District Court and Cause.] 

POCKET ENTRIES 
1947 

Jan. 28 Filed complaint for injunction and treble 
damages. 

Jan. 28 Issued summons — to Marshal. 

Mar. 6 Entered order dismissing for want of 
jurisdiction. 

Apr. 3 Filed summons — returned unexecuted. 

May 17 Filed motion to vacate judgment and re- 
instate case on the docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entered order continuing motion to vacate 
judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record on appeal. 



Mrs. A. C. Shalberg 39 

In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the District Court 
of the United States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 
from 1 to 21, inclusive, constitute the transcript of 
record upon the appeal from a judgment of said 
court in a cause therein numbered Civil 3430, in 
which Philip B. Fleming, Administrator, Office of 
Temporary Controls, is plaintiff and appellant, and 
Mrs. A. C. Shalberg is defendant and appellee ; that 
said transcript has been prepared by me in accord- 
ance with the designation of record on appeal filed 
by the appellant and in accordance with the rules 
of court; that I have compared the foregoing tran- 
script with the original record thereof and that it 
is a full, true and correct transcript of the record 
and proceedings had in said court in said cause, in 
accordance with the said designation as the same 
appears of record and on file at my office and in my 
custody. 

In Testimony Whereof, I have hereunto set my 
hand and affixed the seal of said court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. 



40 Frank 7?. Creedon vs. 

[Endorsed]: Xo. Ilb72. United States Circuit 
Court of Appeals for the Ninth Circuit. Frank R. 
Creedon, Housing- Expediter, Appellant, vs. Mrs. A. 
C. Shalberg, Appellee. Transcript of Record. Upon 
Appeal from the District Court of the United States 
for the District of Oregon. 

Filed June 30, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 11 



Wlnitiis States 

Circuit Court of Uppeate 

Jfor tfje J^intfj Circuit 



FRANK R. CREEDON, Housing Expediter, 

Appellant, 

vs. 

MRS. RICHARD DAVIS, 

Appellee. 



flfrangcript of &ecorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OF RECORD 

SYLVANUS SMITH, 

c/o Commercial Iron Works; 

VICTOR E. HARR, 

Assistant United States Attorney, 
U. S. Court House, Portland, Oregon; 

C. E. KNOWLTON, Jr., and 
JOHN E. HEDRICK, 

3312 White Building, Seattle 1, Washington, 
For Appellant. 

HTo record of attorney for Appellee. 



: i 



44 Frank R. Creedon vs. 

In the District Court of the United States 
for the District of Oregon 

No. Civil 3431 

PHILIP B. FLEMING, Administrator, Office of 
Temporary Controls, 



Plaintiff, 



vs. 
MRS. RICHARD DAVIS, 



Defendant. 



COMPLAINT 

[Complaint for Injunction and Treble Dam- 
ages is similar to the same as set out in com- 
panion cause No. 11670 on pages 4 to 9.] 



[Title of District Court and Cause.] 

ORDER OP DISMISSAL 

Now at this day It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 

March 6, 1947. 



Mrs. Richard Dm- is 45 

[Title of District Court and ( lause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the plaintiff above named and re- 
spectfully moves the Court to vacate the judgment 
and dismissal entered in the above case and to rein- 
state the case on the docket. 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, JR., 
/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed]: Piled May 17, 1947. 



[Statement of Points and Authorities Relied 
on by the Plaintiff in Support of His Motion to 
Vacate Judgment of Dismissal and Reinstate 
Cases on the Docket is similar to the same as set 
out in companion cause No. 11670 on pages 12 
to 28.] 



46 Frank R. Creedon vs. 

[Title of District Court and Cause.] 

ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this day It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

May 22, 1947. 



[Title of District Court and Cause.] 

NOTICE OF APPEAL 
Notice is hereby given that Philip B. Fleming, 
Administrator of the Office of Temporary Controls, 
the plaintiff named, hereby appeals to the Circuit 
Court of Appeals for the Ninth Circuit, from the 
Order dismissing plaintiff's Complaint entered on 
March 6, 1947. 

/s/ JOHN E. HEDRICK, 

/s/ CHARLES E. KNOWLTON, 
JR., 

Attorneys for Plaintiff. 
[Endorsed] : Filed June 5, 1947. 



Mrs. Hi chard Davis 47 

[ r ritle of District Court and Cause.] 

DOCKET ENTRIES 

1947 

Jan. 28 Filed complaint for injunction and treble 
damages. 

Jan. 28 Issued summons — to Marshal. 

Mar. 6 Filed summons. 

Mar. 6 Entered order dismissing for want of 
jurisdiction. 

May 17 Filed motion to vacate judgment and re- 
instate case on the docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entered order continuing motion to va- 
cate judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record on appeal. 



In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the District Court of 
the United States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 
from 1 to 21, inclusive, constitute the transcript of 
record upon appeal from a judgment of said court 
in a cause therein numbered Civil 3431, in which 
Philip B. Fleming, Administrator, Office of Tempo- 



48 Frank R. Creedon vs. 

rary Controls, is plaintiff and appellant, and Mrs. 
Richard Davis is defendant and appellee; that said 
transcript has been prepared by me in accordance 
with the designation of record on appeal filed by 
the appellant and in accordance with the rules of 
court; that I have compared the foregoing' transcript 
with the original record thereof and that it is a full, 
true and correct transcript of the record and pro- 
ceedings had in said court in said cause, in accord- 
ance with the said designation as the same appears 
of record and on file at my office and in my custody. 
In Testimony Whereof, I have hereunto set mv 

• 7 ml 

hand and affixed the seal of said court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. 



[Endorsed]: No. 11673. United States Circuit 
Court of Appeals for the Ninth Circuit. Frank R. 
Creedon, Housing Expediter, Appellant, vs. Mrs. 
Richard Davis, Appellee. Transcript of Record. 
Upon Appeal from the District Court of the United 
States for the District of Oregon. 

Filed June 30, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 11674 

Hntteti states 

Circuit Court of appeals 

jfor tfje J^intf) Circuit, 



FRANK R. CREEDON, Housing Expediter, 

Appellant, 

vs. 

ADOLPH NEUBERT, 

Appellee. 



GDrangcript of Eecorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OP RECORD 

SYLVANUS SMITH, 

c/o Commercial Iron Works; 

VICTOR E. HARR, 

Assistant United States Attorney, 

United States Court House, Portland, Oregon; 

JOHN E. HEDRICK and 
CHARLES E. KNOWLTON, JR., 

3312 White-Henry-Stuart Building, 
Seattle 1, Washington, 

For Appellant. 
No record of Attorney for Appellee. 



52 Frank i?. Creedon vs. 

In the District Court of the United States 
for the District of Oregon 

No. Civil 3435 

PHILIP B. FLEMING, Administrator Office of 
Temporary Controls, 



Plaintiff, 



vs. 
ADOLPH NEUBERT, 



Defendant. 



COMPLAINT 



[Complaint for Injunction and Treble Dam- 
ages is similar to the same as set out in com- 
panion cause No. 11670 on pages 4 to 9.] 



[Title of District Court and Cause.] 

ORDER OF DISMISSAL 

Now at this day It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 

March 6, 1947. 



Adolph Nt t(b< rt 53 

[Title of District Court and Cause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the above plaintiff and respectfully 
moves the Court to vacate the judgment and dis- 
missal entered in the above case and to reinstate the 
case on the docket. 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, JR., 

/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed] : Filed May 17, 1947. 



[Statement of Points and Authorities Relied 
on by the Plaintiff in Support of His Motion to 
Vacate Judgment of Dismissal and Reinstate 
Cases on the Docket is similar to the same as set 
out in companion cause No. 11670 on pages 12 
to 28.] 



54 Frank R. Creedon vs. 

[Title of District Court and Cause.] 

ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this day It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

May 22, 1947. 



[Title of District Court and Cause.] 

NOTICE OF APPEAL 

Notice is hereby given that Philip B. Fleming, 
Administrator of the Office of Temporary Controls, 
the plaintiff named above, hereby appeals to the 
Circuit Court of Appeals for the Ninth Circuit, 
from the Order dismissing plaintiff's Complaint en- 
tered in this action on March 6, 1947. 

/s/ JOHN E. HEDRICK, 

/s/ CHARLES E. KNOWLTON, 
JR., 

Attorneys for Plaintiff. 

[Endorsed] : Filed June 5, 1947. 



Adolph Xenix rt 55 

[Title of District Court and Cause.] 
DOCKET ENTRIES 

1947 

Jan. 28 Piled complaint for injunction and treble 
damages. 

Jan. 28 Issued summons — to Marshal. 

Feb. 28 Filed summons with Marshal's return. 

Mar. 6 Entered order dismissing for want of 
jurisdiction. 

May 17 Filed motion to vacate judgment and re- 
instate case on the docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entered order continuing motion to va- 
cate judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record on appeal. 



In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the District Court 
of the United States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 
from 1 to 21, inclusive, constitute the transcript of 
record upon the appeal from a judgment of said 
court in a cause therein numbered Civil 3435, in 
wiiich Philip B. Fleming, Administrator, Office of 



56 Frank R. Creedon vs. 

Temporary Controls, is plaintiff and appellant, and 
Adolph Xeubert is defendant and appellee; that 
said transcript has been prepared by me in accord- 
ance with the designation of record on appeal filed 
by the appellant and in accordance with the rules of 
court; that I have compared the foregoing tran- 
script with the original record thereof and that it is 
a full, true and correct transcript of the record and 
proceedings had in said court in said cause, in 
accordance with the said designation as the same 
appears of record and on file at my office and in my 
custody. 

In Testimony Whereof, I have hereunto set my 
hand and affixed the seal of said Court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. 



[Endorsed]: No. 11674. United States Circuit 
Court of Appeals for the Ninth Circuit. Frank R. 
Creedon, Housing Expediter, Appellant, vs. Adolph 
Neubert, Appellee Transcript of Record. Upon 
Appeal from the District Court of the United States 
for the District of Oregon. 

Filed June 30, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 11675 

Wlnittb States 

Circuit Court of appeals 

Jfor tfje i^inti) Circuit 



FRANK R. CREEDON, Housing Expediter, 

Appellant, 

vs. 

L. R. CHAMBERS, 

Appellee. 



transcript of Eecorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OP RECORD 

SYLVANUS SMITH, 

c/o Commercial Iron Works; 

J. ROBERT PATTERSON, : 

Assistant United States Attorney, 
U. S. Court House, Portland, Oregon; 

C. E. KNOWLTON, JR., and 

JOHN E. HEDRICK, 
3312 White Building, 
Seattle 1, Washington, 

For Appellant. 
No record of Attorney for Appellee. : * 



60 Frank R. Creedon 

In the District Court of the United States 
for the District of Oregon 

No. Civil 3462 

PHILIP B. FLEMING, Administrator Office of 
Temporary Controls, 



Plaintiff, 



vs. 
L. R. CHAMBERS, 



Defendant. 



COMPLAINT 

[Complaint for Injunction and Treble Dam- 
ages is similar to the same as set out in com- 
panion cause No. 11670 on pages 4 to 9.] 



[Title of District Court and Cause.] 

ORDER OP DISMISSAL 

Now at this day It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 
March 6, 1947. 



vs. L. R. Chambers 61 

[Title of District Court and Cause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the above plaintiff and respectfully 
moves the Court to vacate the judgment and dis- 
missal entered in the above case and to reinstate the 
case on the docket. 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, JR., 

/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed]: Filed May 17, 1947. 



[Statement of Points and Authorities Relied 
on by the Plaintiff in Support of His Motion to 
Vacate Judgment of Dismissal and Reinstate 
Cases on the Docket is similar to the same as set 
out in companion cause No. 11670 on pages 12 
to 28.] 



62 Frank R. Creedon 

[Title of District Court and Cause.] 

ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this dav It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

May 22, 1947. 



[Title of District Court and Cause.] 

NOTICE OP APPEAL 

Notice is hereby given that Philip B. Fleming, 
Administrator, of Office of Temporary Controls, the 
plaintiff named above, hereby appeals to the Cir- 
cuit Court of Appeals for the Ninth Circuit, from 
the Order dismissing plaintiff's Complaint entered 
in this action on March 6, 1947. 

/s/ JOHN E. HEDRICK, 

/s/ CHARLES E. KNOWLTON, 
JR. 

[Endorsed] : Filed June 5, 1947. 



vs. L. B. Chambers 63 

[Title of District Court and Cause.] 

DOCKET ENTRIES 

1947 

Feb. 12 Filed complaint for injunction and for 
treble damages. 

Feb. 12 Issued summons — to Marshal. 

Mar. 6 Entered order dismissing for want of jur- 
isdiction. 

Mar. 20 Filed summons — returned unserved. 

May 17 Filed motion to vacate judgment and rein- 
state case on the docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entering order continuing motion to va- 
cate judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record on appeal. 



In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the District Court 
of the United States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 
from 1 to 22, inclusive, constitute the transcript of 
record upon the appeal from a judgment of said 
court in a cause therein numbered Civil 3462, in 
which Philip B. Fleming, Administrator, Office of 



64 Frank B. Creedon 

Temporary Controls, is plaintiff and appellant, and 
L. R. Chambers is defendant and appellee; that said 
transcript has been prepared by me in accordance 
with the designation of record on appeal filed by the 
appellant and in accordance with the rules of Court; 
that I have compared the foregoing transcript with 
the original record thereof and that it is a full, true 
and correct transcript of the record and proceedings 
had in said court in said cause, in accordance with 
the said designation as the same appears of record 
and on file at my office and in my custody. 

In Testimony Whereof, I have hereunto set my 
hand and affixed the seal of said Court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. 



[Endorsed]: No. 11675. United States Circuit 
Court of Appeals for the Ninth Circuit. Frank R. 
Creedon, Housing Expediter, Appellant, vs. L. R. 
Chambers, Appellee. Transcript of Record. Upon 
Appeal for the District Court of the United States 
for the District of Oregon. 

Filed June 30, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 11676 

Unite*) States 

Circuit Court of appeals 

Jfor tfje Jlmrt) Circuit 



PRANK R. CREEDON, Housing Expediter, 

Appellant, 

vs. 

GEORGE ROUSE, 

Appellee. 



Crantfcript of &ecorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OF RECORD 

SYLVANUS SMITH, 

c/o Commercial Iron Works; 

J. ROBERT PATTERSON, 

Assistant United States Attorney, 

U. S. Court House, Portland, Oregon; 

C. E. KNOWLTON, JR., and 

JOHN E. HEDRICK, 
3312 White Building, 
Seattle 1, Washington, 
For Appellant. 

REUBEN G. LENSKE, 

American Legion Building, 
Portland, Oregon, 

For Appellee. 



68 Frank R. Creedon 

In the District Court of the United States 
for the District of Oregon 

No. Civil 3463 

PHILIP B. FLEMING, Administrator Office of 
Temporary Controls, 



Plaintiff, 



vs. 
GEORGE ROUSE, 



Defendant. 



COMPLAINT 

[Complaint for Injunction and Treble Dam- 
ages is similar to the same as set out in com- 
panion cause No. 11670 on pages 4 to 9.] 



[Title of District Court and Cause.] 

ORDER OF DISMISSAL 

Now at this day It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 

March 6, 1947. 



vs. George Rouse 69 

[Title of District Court and Cause.] 

MOTION TO DISMISS 

Comes now defendant and moves the court for 
an order dismissing the above-entitled suit. 

In the event the above motion is denied, defend- 
ant moves that plaintiff set forth in said complaint 
the period that they claim the alleged violations oc- 
curred. 

/s/ REUBEN G. LENSKE, 

Attorney for Defendant, 
American Legion Bldg. 

Among the grounds for dismissal, defendant will 
stress that the plaintiff has no right to bring said 
cause. 

Service of the above motion accepted this 26th 
day of March, 1947. 

/s/ VICTOR E. HARR, 

Assistant U. S. Attorney. 

I certify that on March 26th, 1947, I served the 
Office of Temporary Controls, OPA, with the within 
Motion by their attorney, Sylvanus Smith, in that 
I deposited a copy of the within Motion with the 
office of the U. S. Attorney with the understanding 
that it would be forwarded to Mr. Smith. 

/s/ S. I. SPIEGEL. 

[Endorsed]: Piled March 27, 1947. 



70 Frank B. Creedon 

[Title of District Court and Cause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the plaintiff above named and re- 
spectfully moves the Court to vacate the judgment 
and dismissal entered in the above case and to re- 
instate the case on the docket. 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, JR., 

/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed]: Filed May 17, 1947. 



[Statement of Points and Authorities Relied 
on by the Plaintiff in Support of His Motion to 
Vacate Judgment of Dismissal and Reinstate 
Cases on the Docket is similar to the same as set 
out in companion cause No. 11670 on pages 12 
to 28.] 



vs. George Rouse 71 

[Title of District Court and Cause.] 

ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this day It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

Mav 22, 1947. 



[Title of District Court and Cause.] 

NOTICE OP APPEAL 

Notice is hereby given that Philip B. Fleming, 
Administrator of the Office of Temporary Controls, 
the plaintiff named above, hereby appeals to the 
Circuit Court of Appeals for the Ninth Circuit, 
from the Order dismissing plaintiff's Complaint 
entered in this action on March 6, 1947. 

/s/ JOHN E. HEDRICK, 

/s/ CHARLES E. KNOWLTON, 
JR., 

Attorneys for Plaintiff. 

[Endorsed]: Filed June 5, 1947. 



72 Frank R. Creedon 

[Title of District Court and Cause.] 

DOCKET ENTRIES 

1947 

Feb. 12 Filed complaint for injunction and for 
treble damages. 

Feb. 12 Issued summons — to Marshal. 

Mar. 6 Entered order dismissing for want of ju- 
risdiction. 

Mar. 6 Filed summons with Marshal's return. 

Mar. 27 Filed defendant's motion for order of dis- 
missal. 

May 17 Filed motion to vacate judgment and re- 
instate case on the docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entered order continuing motion to va- 
cate judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record on appeal. 



In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff*, Clerk of the District Court 
of the Tinted States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 
from 1 to 22, inclusive, constitute the transcript of 
record upon the appeal from a judgment of said 



vs. George Rouse 73 

court in a cause therein numbered Civil 3463, in 
which Philip B. Fleming, Administrator, Office of 
Temporary Controls, is plaintiff and appellant, and 
George Rouse is defendant and appellee; that said 
transcript has been prepared by me in accordance 
with the designation of record on appeal filed by 
the appellant and in accordance with the rules of 
Court; that I have compared the foregoing tran- 
script with the original record thereof and that it 
is a full, true and correct transcript of the record 
and proceedings had in said court in said cause, in 
accordance with the said designation as the same 
appears of record and on file at my office and in my 
custody. 

In Testimony Whereof, I have hereunto set my 
hand and affixed the seal of said Court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORPF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. 



[Endorsed] : No. 11676. United States Circuit 
Court of Appeals for the Ninth Circuit. Prank R. 
Creedon, Housing Expediter, Appellant, vs. George 
Rouse, Appellee. Transcript of Record. LTpon Ap- 
peal from the District Court of the United States for 
the District of Oregon. 

Piled June 30, 1947. 

/s/ PAUL P. O'BRIEN, 
Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 11677 

(Hmteb States 

Circuit Court of Appeals 

Jfor tfre i^intf) Circuit, 



FRANK R. CREEDON, Housing Expediter, 

Appellant, 

vs. 

HERMAN HAGE and EDWARD C. HAGE, 

Appellees. 



Gfrangcript of Eecorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OF RECORD 

SYLVANUS SMITH, 

c/o Commercial Iron Works; 

J. ROBERT PATTERSON, 

Assistant United States Attorney, 

U. S. Court House, Portland, Oregon; 

EDWARD B. TWINING, 

Assistant United States Attorney, 
U. S. Court House, Portland, Oregon; 

C. E. KNOWLTON, JR., and 

JOHN E. HEDRICK, 

3312 White Building, 
Seattle 1, Washington, 

For Appellant. 

E. B. McCUTCHAN, 

1212 Failing Building, 
Portland, Oregon, 

For Appellees. 



78 Frank R. Creedon vs. 

In the District Court of the United States 
for the District of Oregon 

Civil Action File No. 3464 

PHILIP B. FLEMING, Administrator, Office of 

Temporary Controls, 

Plaintiff, 

vs. 

HERMAN HAGE and EDWARD C. HAGE, 

Defendants. 

COMPLAINT 

[Complaint for Injunction and Treble Dam- 
ages is similar to the same as set out in com- 
panion cause No. 11670 on pages 4 to 9.] 



[Title of District Court and Cause.] 

STIPULATION 

It is hereby stipulated by and between J. Robert 
Patterson, Assistant United States Attorney, of at- 
torneys for plaintiff, and E. B. McCutchan, attor- 
ney for defendants, that defendants shall have an 
extension of time in which to answer or otherwise 
plead to plaintiff's Complaint until the 1st day of 

April, 1947. 



Herman Hage and Edward C. Hage 79 

I )ated at Portland, Oregon, this 6th day of March, 
1947. 

/s/ E. B. TWINING, 

Of Attorneys for Plaintiff. 

/s/ E. B. McCUTCHAN, 

Attorney for Defendants. 

[Endorsed] : Piled March 6, 1947. 



[Title of District Court and Cause.] 

ORDER OF DISMISSAL 

Now at this day It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 
March 6, 1947. 



[Title of District Court and Cause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the above plaintiff and respectfully 
moves the Court to vacate the judgment and dis- 
missal entered in the above case and to reinstate the 
case on the docket. 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, JR., 
/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 
[Endorsed]: Filed May 17, 1947. 



80 Frank B. Creedon vs. 

[Statement of Points and Authorities Relied 
on by the Plaintiff in Support of His Motion to 
Vacate Judgment of Dismissal and Reinstate 
Cases on the Docket is similar to the same as set 
out in companion cause No. 11670 on pages 12 
to 28.] 



[Title of District Court and Cause.] 

ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this day It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

May 22, 1947. 



[Title of District Court and Cause.] 

NOTICE OF APPEAL 

Notice is hereby given that Philip B. Fleming, 
Administrator of the Office of Temporary Controls, 
the plaintiff named above, hereby appeals to the Cir- 
cuit Court of Appeals for the Ninth Circuit, from 
the Order dismissing plaintiff's Complaint entered 
in this action on March 6, 1947. 

/s/ JOHN E. HEDRICK, 

/s/ CHARLES E. KNOWLTON. 

[Endorsed] : Filed June 5, 1947. 



Herman Hdgi and Edwa/rd C. Hage 81 

DOCKET ENTRIES 

1947 

Feb. 12 Filed complaint for injunction and for 
treble damages. 

Feb. 12 Issued summons — to Marshal. 

Feb. 14 Filed summons with Marshal's return. 

Mar. 6 Filed stipulation for extension of time to 
answer until April 1, 1947. 

Mar. 6 Entered order dismissing for want of ju- 
risdiction. 

May 17 Filed motion to vacate judgment and rein- 
state case on the docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entered order continuing motion to va- 
cate judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record on appeal. 



In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the District Court 
of the United States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 1 
to 23, inclusive, constitute the transcript of record 
upon the appeal from a judgment of said court in a 
cause therein numbered Civil 3464, in which Philip 
B. Fleming, Administrator, Office of Temporary 
Controls, is plaintiff and appellant, and Herman 
Hage and Edward C. Hage are defendants and ap- 



82 Frank R. Creedon vs. 

pellees; that said transcript has been prepared by 
me in accordance with the designation of record on 
appeal filed by the appellant and in accordance with 
the rules of Court; that I have compared the fore- 
going transcript with the original record thereof and 
that it is a full, true and correct transcript of the 
record and proceedings had in said court in said 
cause, in accordance with the said designation as 
the same appears of record and on file at my office 
and in my custody. 

In Testimony Whereof, I have hereunto set my 
hand and affixed the seal of said Court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. 



[Endorsed]: No. 11677. United States Circuit 
Court of Appeals for the Ninth Circuit. Frank R. 
Creedon, Housing Expediter, Appellant, vs. Her- 
man Hage and Edward C. Hage, Appellees. Tran- 
script of Record. Upon Appeal from the District 
Court of the United States for the District of 
Oregon. 

Filed June 30, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No.11678 

Uniteb States; 

Circuit Court of Sppeate 

Jfor ttje iSmtt) Circuit 



FRANK R. CREEDON, Housing Expediter, 

Appellant, 

vs. 

J. H. JEFFERS, doing business as NORBLAD 
HOTEL, 

Appellee. 



^Transcript of &ecort> 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



NAMES AND ADDRESSES OF ATTORNEYS 

OF RECORD 

SYLVANUS SMITH, 

c/o Commercial Iron Works; 

J. ROBERT PATTERSON, 

Assistant United States Attorney, 
U. S. Court House, Portland, Oregon ; 

C. E. KNOWLTON, JR., and 

JOHN E. HEDRICK, 

3312 White Building, Seattle 1, Washington, 
For Appellant. 

No record of attorney for Appellee. 



86 Frank R. Creedon vs. 

In the District Court of the United States 
for the District of Oregon 

No. Civil 3465 

PHILIP B. FLEMING, Administrator, Office of 
Temporary Controls, 

Plaintiff, 

vs. 

J. H. JEFFERS, doing business as NORBLAD 
HOTEL, 

Defendant. 

COMPLAINT 

[Complaint for Injunction and Treble Dam- 
ages is similar to the same as set out in com- 
panion cause No. 11670 on pages 4 to 9.] 



[Title of District Court and Cause.] 

ORDER OF DISMISSAL 

Now at this day It Is Ordered that this cause be 
and it is hereby dismissed for want of jurisdiction. 

March 6, 1947. 

[Title of District Court and Cause.] 

MOTION TO VACATE JUDGMENT AND 
REINSTATE CASE ON THE DOCKET 

Comes Now the above plaintiff and respectfully 
moves the Court to vacate the judgment and dis- 



J. H. Jeffers, et a!. 87 

missal entered in the above case and to reinstate the 
case on the docket. 

In support of this Motion plaintiff attaches hereto 
and hereby makes a part hereof the attached State- 
ment of Points and Authorities. 

Dated this 16th day of May, 1947. 

/s/ C. E. KNOWLTON, JR., 

/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 

[Endorsed]: Piled May 17, 1947. 



[Statement of Points and Authorities Relied 
on by the Plaintiff in Support of His Motion to 
Vacate Judgment of Dismissal and Reinstate 
Cases on the Docket is similar to the same as set 
out in companion cause No. 11670 on pages 12 
to 28.] 



[Title of District Court and Cause.] 

ORDER CONTINUING HEARING ON 
MOTION TO DISMISS 

Now at this day It Is Ordered that the hearing 
on the motion of the plaintiff to vacate judgment 
and reinstate this cause on the docket of this court 
be and it is hereby continued for future hearing. 

May 22, 1947. 



88 Frank B. Crcedon vs. 

[Title of District Court and Cause.] 

NOTICE OF APPEAL 
Notice is hereby given that Philip B. Fleming, 
Administrator of the Office of Temporary Controls, 
the plaintiff named above, hereby appeals to the 
Circuit Court of Appeals for the Ninth Circuit, 
from the Order dismissing plaintiff's Complaint en- 
tered in this action on March 6, 1947. 

/s/ JOHN E. HEDRICK, 
/s/ CHARLES E. KNOWLTON, Jr., 
Attorneys for Plaintiff. 

[Endorsed] : Filed June 5, 1947. 



[Title of District Court and Cause.] 

DOCKET ENTRIES 
1947 

Feb. 12 Filed complaint for injunction and for 
treble damages. 

Feb. 12 Issued summons — to Marshal. 

Mar. 6 Filed summons with Marshal's return. 

Mar. 6 Entered order dismissing for want of ju- 
risdiction. 

May 17 Filed motion to vacate judgment and rein- 
state case on the docket. 

May 17 Filed statement of points in support of 
above motion. 

May 22 Entered order to continue motion to va- 
cate judgment for future setting. 

June 5 Filed notice of appeal by plaintiff. 

June 5 Filed designation of record on appeal. 



J. H. Jeffers, et ah 89 

In the District Court of the United States 
for the District of Oregon 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the District Court 
of the United States for the District of Oregon, do 
hereby certify that the foregoing pages numbered 
from 1 to 21, inclusive, constitute the transcript of 
record upon the appeal from a judgment of said 
court in a cause therein numbered Civil 3465, in 
which Philip B. Fleming, Administrator, Office of 
Temporary Controls, is plaintiff and appellant, and 
J. H. Jeffers, doing business as Norblad Hotel, is 
defendant and appellee; that said transcript has 
been prepared by me in accordance with the desig- 
nation of record on appeal filed by the appellant and 
and in accordance with the rules of Court; that I 
have compared the foregoing transcript with the 
original record thereof and that it is a full, true 
and correct transcript of the record and proceedings 
had in said court in said cause, in accordance with 
the said designation as the same appears of record 
and on file at my office and in my custody. 

In Testimony Whereof, I have hereunto set my 
hand and affixed the seal of said Court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Deputy Clerk. 



90 Frank R. Creedon vs. 

[Endorsed]: No. 11678. United States Circuit 
Court of Appeals for the Ninth Circuit. Frank R. 
Creedon, Housing Expediter, Appellant, vs. J. H. 
Jeffers, doing business as Norblad Hotel, Appellee. 
Transcript of Record. Upon Appeal from the Dis- 
trict Court of the United States for the District of 
Oregon. 

Filed June 30, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



23mtcb States 

Circuit Court of appeals 



Jfor tfje iJtntl) Circuit* 



FRANK R. CREEDON, Housing Expediter, Office 
of Housing Expediter, 

Appellant, 
vs. 

DOROTHY F. BORDERS, No. 11670 

MRS. A. C. SHALBERG, No. 11672 

MRS. RICHARD DAVIS, No. 11673 

ADOLPH NEUBERT, No. 11674 

L. R. CHAMBERS, No. 11675 

GEORGE ROUSE, No. 11676 

HERMAN HAGE and EDWARD C. HAGE, No. 11677 

J. H. JEFFERS, d/b/a Norblad Hotel, No. 11678 

Appellees. 



transcript of Jkcorb* 



Upon Appeals from the District Court of the United States 
for the District of Oregon 



PROCEEDINGS HAD IN THE 

UNITED STATES CIRCUIT COURT OF APPEALS 

FOR THE NINTH CIRCUIT 



Dorothy F. Borders, et al. 93 

In the Circuit Court of Appeals of the United States 

for the Ninth Circuit 

Nos. 11670, 11672, 11673, 11674, 11675, 11676, 

11677, 11678 

STATEMENT OP POINTS 

Plaintiff Appellant, Philip B. Fleming, by his at- 
torneys, Charles E. Knowlton, Jr., and John E. 
Hedrick, designates the following as his statement 
of points on appeal: 

1. The District Court of the United States for 
the District of Oregon erred in dismissing the action. 

2. The District Court of the United States for 
the District of Oregon erred in holding that plain- 
tiff is not an officer of the United States and author- 
ized bv law to sue and is not the true and valid sue- 
cessor of Paul A. Porter, Administrator, Office of 
Price Administration. 

Dated this 16th day of June, 1947. 

/s/ CHARLES E. KNOWLTON, 
JR., 

/s/ JOHN E. HEDRICK, 

Of Attorneys for Plaintiff. 
[Endorsed] : Filed June 28, 1947. 



94 Frank R. Creedon vs. 

At a Stated Term, to wit: The October Term, 
1946, of the United States Circuit Court of Appeals 
for the Ninth Circuit, held in the Court Room 
thereof, in the City and County of San Francisco, 
in the State of California, on Monday, the twenty- 
fifth day of August, in the year of our Lord one 
thousand nine hundred and forty-seven. 

Present : 

Honorable Francis A. Garrecht, 

Senior Circuit Judge, Presiding; 

Honorable Albert Lee Stephens, 
Circuit Judge; 

Honorable Homer T. Bone, 
Circuit Judge. 



[Title and Causes.] 

ORDER FOR SUBSTITUTION OF 
PARTY APPELLANT 

Upon consideration of the petition of Frank R. 
Creedon, Housing Expediter, that he be substituted 
as party appellant herein in the place and stead of 
Philip B. Fleming, and good cause therefor ap- 
pearing, 

It Is Ordered that said petition be, and hereby is 
granted, and that Frank R. Creedon, Housing Ex- 
pediter, be, and he is hereby substituted, as party 
appellant in each of above causes in the place and 



Dorothy F. Borders, et ah 95 

stead of Philip B. Fleming, Administrator, Office 
of Temporary Controls, and these actions shall here- 
after be designated as Frank R. Creedon, Housing* 
Expediter, Office of Housing Expediter, appellant, 
versus Borders, No. 11670; vs. Mrs. A. C. Shalberg, 
No. 11672; vs. Mrs. Richard Davis, No. 11673; vs. 
Adolph Neuberg, No. 11674 ; vs. L. R. Chambers, No. 
11675 ; vs. George Rouse, No. 11676 ; vs. Hage, et al., 
No. 11677, and vs. J. H. Jeffers, etc., No. 11678. 



[Title of Circuit Court of Appeals and Cause.] 

ORDER CONCERNING PRINTING OF REC- 
ORDS OF EIGHT CASES NOT CONSOLI- 
DATED 

Upon application of the appellant and it appear- 
ing to the Court that good cause having been shown, 
therefore it is hereby 

Ordered that the record of the above entitled eight 
cases on this appeal be printed as one record under 
the title of all causes, and it is further 

Ordered that in said record only one complaint 
be printed under the title of all causes, and it is 
further 

Ordered that only one order of substitution 
wherein Frank R. Creedon, Housing Expediter, 
Office of the Housing Expediter, plaintiff, being 
substituted for Philip B. Fleming, Administrator, 



96 Frank R. Creedon vs. 

Office of Temporary Controls, be printed under the 
title of all causes. 

Done this 22nd day of September, 1947. 

WILLIAM DENMAN, 
U. S. Circuit Judge. 

Presented by: 

/s/ JOHN E. HEDRICK, 

Attorney for Plaintiff. 

[Endorsed] : Order, etc., filed Sept. 22, 1947. 



In the United States Circuit Court of Appeals 
for the Ninth Circuit 



Philip B. Fleming, Administrator, Office of Tem- 
porary Controls, appellant 

vs. 

Dorothy F. Borders, No. 11(370, Mrs. A. C. Shalberg, 
No. 11672, Mrs. Richard Davis, No. 11673, Adolph 
Neubert, No. 11674, L. R. Chambers, No. 11675, 
George Rouse, No. 11676, Herman Hage and Ed- 
ward C. Hage, No. 11677, J. R. Jeffers, Doing 
Business as Norblad Hotel, No. 11678, appellees 



APPELLANT'S BRIEF 



ED DUPREE, 

Acting General Counsel, 

HUGO V. PRUCHA, 

Chief Litigation Unit, 

IRVING M. GRUBER, 

Chief Appellate Attorney, 

NATHAN SIEGEL, 
Special Appellate Attorney, 
Attorneys for Frank R. Creedon, Housing Expediter, 

Office of the Housing Expediter, 

Office of the General Counsel, 
Temporary "E" Building, Washington 25, D. C. 



INDEX 

Page 

Statement of jurisdiction 1 

Statement of the case 2 

Specification of errors: 

1. The Court below erred in dismissing these actions for want of 

jurisdiction 3 

Argument : 

I. Fleming had authority to institute these cases 3 

Conclusion 6 

Appendix A. — Statutes and regulations involved 7 

Appendix B. — Opinion in Fleming v. Findlay, etc 19 

TABLE OF AUTHORITIES 
Cases : 

Fleming v. Findlay, Civil Xo. 3437, not reported 2 

Fleming v. Mohawk Wrecking & Lumber Co., 67 S. Ct. 1129, 

decided April 28, 1947 3 

Statutes and regulations: 

Emergency Price Control Act (56 Stat, 23, 50 U. S. C. App. 901 
et seq.) : 

Section 1 (b) 7 

Section 205 (a) 8 

Section 205 (e) 8 

Section 4 (a) 7 

Miscellaneous: 

Judicial Code: 

Section 128 (28 U. S. C. A. 225) 2 

Executive Orders: 

9809 (11 F. R. 14281) 9 

9841 (12 F. R. 2645) 12 

(i) 



706.-j98— 47- 



In the United States Circuit Court of Appeals 
for the Ninth Circuit 



Philip B. Fleming, Administrator, Office of Tem- 
porary Controls, appellant 

vs. 

Dorothy F. Borders, No. 11670, Mrs. A. C. Shalberg, 
No. 11672, Mrs. Richard Davis, No. 11673, Adolph 
Neubert, No. 11674, L. R. Chambers, No. 11675, 
George Rouse, No. 11676, Herman Hage and Ed- 
ward C. Hage, No. 11677, J. R. Jeffers, Doing 
Business as Norblad Hotel, No. 11678, appellees 



APPELLANT'S BRIEF 



STATEMENT OF JURISDICTION 

The Housing Expeditor appeals from a final judg- 
ment of the United States District Court for the 
District of Oregon entered on March 6, 1947, dis- 
missing certain actions brought in accordance with 
Sections 205 (a) and (e) of the Emergency Price 
Control Act of 1942, as amended (56 Stat. 23, 50 
IT. S. C. App. 901 et seq.) for violations of the Rent 
Regulation for Housing (10 F. R. 13528) prohibited 
by Section 4 (a) of said Act. Notice of appeal was 
filed on June 5, 1947 (R. 29, 38, 46, 54, 62, 71, 80, 88). 
Jurisdiction of the District Court was invoked under 

(i) 



Sections 205 (a), (c), and (e) of said Act (50 U. S. C. 
Sections 925 (a), (c), and (e), and the jurisdiction 
of this Court is invoked under Section 128 of the 
Judicial Code (28 U. S. C. A 225). 

STATEMENT OF THE CASE 

These actions, which have been consolidated by 
order of this court dated September 22, 1947 (R. 94- 
95), were instituted at various times from January 28, 
1947 to February 12, 1947 by Philip B. Fleming, 
Administrator, Office of Temporary Controls in the 
District Court of the United States for the District 
of Oregon (R. 4, 36, 44, 52, 60, 68, 78, 86). The 
complaints all asked for injunctive relief and treble 
damages because defendants had violated the Rent 
Regulation. The defendants moved to dismiss these 
complaints on the grounds that: (a) plaintiff had no 
legal capacity to sue; (b) the complaint did not state 
facts sufficient to constitute a suit against the defend- 
ants in that plaintiff's cause of action was founded 
upon the Emergency Price Control Act of 1942, which 
had expired on June 30, 1946; and (c) the complaint 
did not state facts sufficient to state a cause of action 
in that the Emergency Price Control Act of 1942, as 
amended and extended, is unconstitutional (R. 10, 69). 

Judge McColloch ordered that the causes be dis- 
missed "for want of jurisdiction" on March 6, 1947 
(R. 11). He made no statement of his reasons for 
dismissing these actions, but on February 15, 1947, in 
the similar case of Fleming v. Fincttay, Civil No. 3437, 
not reported, he also dismissed the action "on juris- 
dictional grounds. " He stated that: 



I am dismissing tins case which is one of several 
that have recently been filed so that the author- 
ity of General Fleming can be tested in an 
appellate court, if that is OPA's wish. 

In his opinion, which is printed in the appendix 
hereto p. 19, he stated that General Fleming had 
no authority because he had not been confirmed by 
the Senate as Price Administrator. It may safely be 
assumed that Judge McColloch's opinion in the Find- 
la/y case furnishes the reason for his decision in the 
instant cases since he pointed out in the Findlay case 
that it was one of several such cases. 

On August 25, 1947, this Court granted the appli- 
cation of Frank R. Creedon, Housing Expediter, to 
be substituted as party-appellant herein in the place 
and stead of Philip B. Fleming in all of these cases 
(R, 94-95). 

SPECIFICATION OF ERRORS 

1. The court below erred in dismissing these actions for want 

of jurisdiction 

ARGUMENT 
I 

Fleming had authority to institute these cases 

The desire of the court below to have General 
Fleming's authority to institute actions under the 
Emergency Price Control Act tested in an Appellate 
Court was satisfied in Fleming v. Mohawk Wrecking 
& Lumber Co., 67 S. Ct. 1129, decided April 28, 1947. 
In that case the defendant argued that Fleming 



could not be substitued for Paul Porter, in whose 
name the action had been commenced, because, inter 
alia, Fleming had not been confirmed by the Senate 
as Price Administrator. The Court rejected this 
contention and held that Fleming could be substituted, 
declaring (p. 1133) : 

To hold that an officer, previously confirmed 
by the Senate, must be once more confirmed in 
order to exercise the powers transferred to him 
by the President would be quite inconsistent 
with the broad grant of power given the Presi- 
dent by the First War Powers Act. Any 
doubts on this score w 7 ould, moreover, be re- 
moved by the recognition by Congress in a 
recent appropriation of the status of the Tem- 
porary Controls Administrator. That recogni- 
tion was an acceptance or ratification by 
Congress of the President's action in Executive 
Order No. 9809. Swayne cf Hoyt, Ltd. v. 
United States, 300 U. S. 297, 301, 302, 57 S. 
Ct. 478, 479, 480, 81 L. Ed. 659; Brooks v. 
Dewar, supra. 

For these reasons Fleming is a sucessor in 
office of Porter and may be substituted as a 
party under Rule 25, Rules of Civil Procedure, 
28 U. S. C. A. following section 723 c. 

In view of the Supreme Court's holding, the deci- 
sion below was clearly erroneous. 

Moreover, the recent appropriation by Congress for 
the Housing Expediter "to carry out the provisions 
of law and Executive Orders 9809 and 9841 relative to 
rent control" (Public Law 271, 80th Cong., Ch. 361, 



5 

1st Sess.) 1 i s further evidence of Congressional intent 
that liabilities created prior to June 30, 1947, are not 
washed out after that date, and that Congress desired 
the Housing Expediter to proceed with suit to redress 
them (See too, Fleming v. Mohawk Wrecking and 
Lumber Co., 331 U. S. at p. 119). 

Just as recognition in the appropriation provided 
by Public Law 20, 80th Congress, 1st Session, con- 
stituted "an acceptance or ratification by Congress of 
the President's action in Executive Order No. 9809" 
{Fleming v. Mohawk Wrecking and Lumber Co., 67 
S. Ct. 1129, 1133, footnote 10), so too recognition in 
the appropriation of Public Law 271, 80th Congress, 
1st Session, constituted ratification by Congress of the 
President's action in Executive Order No. 9841 (12 
F. R. 2645), which transfers the functions with respect 
to rent control to the Housing Expediter (Section 202 



"Housing Expediter 



"office of rent control 



"Salaries and expenses, Office of Kent Control: For expenses 
necessary to carry out provisions of law and Executive Orders 
9809 and 9841 relative to rent control, including personal services 
in the District of Columbia ; services as authorized by section 15 
of the Act of August 2, 1946 (Public Law 600) , at rates not to 
exceed $35 per diem for individuals; printing and binding; test 
rentals for enforcement purposes, authorization in each case to 
have prior approval of the Housing Expediter, or the Deputy 
Expediter, Rent Control, or the Regional Rent Administrator in 
the region in which the transaction is contemplated ; hire of pas- 
senger motor vehicles; attendance at meetings of organizations 
concerned with rent control ; and not to exceed $175,000 for de- 
posit in the Treasury for cost of penalty mail as required by the 
Act of June 28, 1944; $18,074,000; * * *" (Public Law 271, 
80th Cong., Ch. 361, 1st sess.) 



6 

(a) of Executive Order No. 9841, supra), and includes 
among such f mictions, authority "to institute, main- 
tain * * * in hi s own name civil proceedings in 
any court * * relating to the matters trans- 

ferred to him, including any such proceedings pending 
on the effective date of the transfer of any such func- 
tion under this Act" (Section 402 of Executive Order 
No. 9841, supra). (See appendix, p. 12.) 

CONCLUSION 

The judgment below should be reversed and the 
cases remanded for further proceedings. 
Respectfully submitted. 

Ed Dupeee, 
Acting General Counsel, 
Hugo V. Prucha, 
Chief Litigation Unit, 
Irvixg M. Grtjber, 
Chief Appellate Attorney, 
Nathax Siegel, 
Special Appellate Attorney, 
Office of the Housing Expediter, 
Temporary "E" Building, Washington 25, D. C. 



APPENDIX A 

1. The pertinent portions of the Emergency Price 
Control Act of 1942, 56 Stat. 23, 58 Stat. 632, 59 Stat. 
306, 50 U. S. C. App. Supp. V, 901 et seq., provide as 
follows : 

Section 1 (b). The provisions of this Act, 
and all regulations, orders, price schedules, and 
requirements thereunder, shall terminate on 
June 30, 1947, 2 or upon the date of a proclama- 
tion by the President, or upon the date speci- 
fied in a concurrent resolution by the Two 
Houses of the Congress, declaring that the 
further continuance of the authority granted 
by this Act is not necessary in the interest 
of the national defense and security which- 
ever date is the earlier; except that as to 
offenses committed, or rights or liabilities in- 
curred, prior to such termination date, the pro- 
visions of this Act and such regulations, orders, 
price schedules, and requirements shall be 
treated as still remaining in force for the pur- 
pose of sustaining any proper suit, action, or 
prosecution with respect to any such right, lia- 
bility, or offense. 

Section 4 (a). It shall be unlawful, regard- 
less of any contract, agreement, lease, or other 



2 Originally *%Tune 30, 1943.'' On October 2, 1942, amended to 
read "June 30, 1944" (sec. 7 (a) of Stabilization Act of 1942, 56 
Stat. 767). On June 30, 1944, amended to read "June 30, 1945" 
(sec. 101 of Stabilization Extension Act of 1944, 58 Stat. 632). 
On June 30, 1945, amended to read "June 30, 1946" (sec. 1 of Pub. 
Law 108, 79th Cong., 1st sess. ) . On July 25, 1946, amended to read 
"June 30, 1947" (sec. 1 of the Price Control Extension Act of 1946, 
Pub. Law 548, 79th Cong., 2d sess.) . 

(7) 

76659&— 47 2 



8 

obligation heretofore or hereafter entered into, 
for any person to sell or deliver any commod- 
ity, or in the course of trade or business to buy 
or receive any commodity, or to demand or re- 
ceive any rent for any defense-area housing ac- 
commodations, or otherwise to do or omit to 
do any act, in violation of any regulation or 
order under section 2, or of any price schedule 
effective in accordance with the provisions of 
section 206, or of any regulation, order, or 
requirement under section 206 * * * or to 
offer, solicit, attempt, or agree to do, any of the 
foregoing. 

Section 205 (a). Whenever in the judgment 
of the Administrator any person has engaged 
or is about to engage m any acts or practices 
which constitute or will constitute a violation of 
any provision of section 4 of this Act, he may 
make application to the appropriate court for 
an order enjoining such acts or practices, or 
for an order enforcing compliance with such 
provision, and upon a showing by the Admin- 
istrator that such person has engaged or is 
about to engage in any such acts or practices 
a permanent or temporary injunction, restrain- 
ing order, or other order shall be granted with- 
out bond. 

Section 205 (e). If any person selling a com- 
modity violates a regulation, order, or price 
schedule prescribing a maximum price or maxi- 
mum prices, the person who buys such commodity 
for use or consumption other than in the course 
of trade or business may, within one year from 
the date of the occurrence of the violation, except 
as hereinafter provided, briaig an action against 
the seller on account of the overcharge. In 
such action, the seller shall be liable for rea- 
sonable attorney's fees and costs as determined 
by the court, plus whichever of the following 
sums is the greater: (1) Such amount not more 
than three times the amount of the overcharge, 
or the overcharges, upon which the action is 



based as the court in Its discretion may deter- 
mine, or (2) an amount not less than $25 nor 
more than $50, as the court in its discretion may 
determine: Provided, however, That such 
amount shall be the amount of the overcharge or 
overcharges or $25, whichever is greater, if the 
defendant proves that the violation of the regu- 
lation, order, or price schedule in question was 
neither wilfull nor the result of failure to take 
practicable jH'ecautions against the occurrence 
of the violation. For the purposes of this sec- 
tion the payment or receipt of rent for defense- 
area housing accommodations shall be deemed 
the buying or selling of a commodity, as the 
case may be; and the word "overcharge" shall 
mean the amount by which the consideration ex- 
ceeds the applicable maximum price. If any 
person selling a commodity violates a regula- 
tion, order, or price schedule prescribing a 
maximum price or maximum prices, and the 
buyer either fails to institute an action under 
this subsection within thirty days from the 
date of the occurrence of the violation or is 
not entitled for any reason to bring the action, 
the Administrator may institute such action on 
behalf of the United States within such one-year 
period. If such action is instituted by the Ad- 
ministrator, the buyer shall thereafter be barred 
from bringing an action for the same violation 
or violations. Any action under this subsection 
by either the buyer or the Administrator, as 
the case may be, may be brought in any court 
of competent jurisdiction. * * * 

Executive Order 9809 (11 F. R. 14281) 

PROVIDING FOR THE DISPOSITION OF CERTAIN WAR 

AGENCIES 

By virtue of the authority vested in me by the 
( 'onstitution and statutes, including Title I of the 
First War Powers Act, 1941, Title III of the Second 



10 

War Powers Act, 1942, section 201 (b) of the Emer- 
gency Price Control Act of 1942, as amended, and 
section 2 of the Stabilization Act of 1942, and as 
President of the United States, it is hereby ordered, 
for the purpose of further effectuating the transition 
from war to peace and in the interest of the internal 
management of the Government, as follows: 

1. Except as otherwise provided in this order, the 
following agencies and their functions are consoli- 
dated to form one agency in the Office for Emergency 
Management of the Executive Office of the President, 
which shall be known as the Office of Temporary Con- 
trols, namely: the Office of War Mobilization and 
Reconversion, the Office of Economic Stabilization, 
the Office of Price Administration, and the Civilian 
Production Administration. Consistent with appli- 
cable law, the Office of Temporary Controls shall be 
organized and its functions shall be administered in 
such manner as the head thereof may deem desirable. 

2. There shall be at the head of the Office of Tempo- 
rary Controls a Temporary Controls Administrator, 
hereafter referred to as the Administrator, who shall 
be appointed by the President and who shall receive 
a salary at the rate of $12,000 per annum unless the 
Congress shall otherwise provide. Except as other- 
wise provided in this order, the functions of the 
Director of War Mobilization and Reconversion, the 
Economic Stabilization Director, the Price Admin- 
istrator, and the Civilian Production Administrator, 
including such functions of the President as are now 
administered by the said officers, are vested in the 
Administrator. The functions hereby vested in the 
Administrator shall be deemed to include the au- 
thority to maintain in his own name civil proceedings 
relating to matters heretofore under the jurisdiction 



11 



of the Price Administrator (including any such pro- 
eeedings now pending). 



3. 


•X 


•X 


•X 


4. 


X- 


X- 


■X 


5. 


■X 


X- 


■X 


6. 


•X 


* 


■X 


7. 


■X 


■X 


X- 


8. 


■X 


X- 


•X 


9. 


■X 


■X 


■X 


.0. 


X- 


■X 


■X 



11. The authority, records, property, and personnel 
which relate primarily to the functions redistributed 
by this order are transferred to the respective agen- 
cies in which functions are vested pursuant to the 
provisions of this order and the funds which relate 
primarily to such functions are transferred or other- 
wise made available to such respective agencies: 
Provided, That the Director of the Bureau of the 
Budget may in any case limit the records, property, 
personnel, and funds to be so transferred or made 
available to so much thereof as he deems to be re- 
quired for the administration of the transferred 
functions. Such further measures and dispositions 
as may be determined by the Director of the Bureau 
of the Budget to be necessary to effectuate the pur- 
poses and provisions of this paragraph shall be car- 
ried out in such manner as the Director of the Bureau 
of the Budget may direct and by such agencies as he 
may designate. All personnel transferred under the 
provisions of this order which the transferee agencies 
shall respectively find to be in excess of the personnel 
necessary for the administration of the functions 
transferred to such agencies by this order shall, if not 
retransferred under existing law to other positions in 
the Government, be separated from the service. 



12 

12. All prior Executive orders or parts thereof in 
conflict with this order are amended accordingly. All 
other prior orders, regulations, rulings, directives, and 
other actions relating to any function or agency trans- 
ferred by this order or issued by any such agency 
shall remain in effect except as they are inconsistent 
herewith or are hereafter amended or revoked under 
proper authority. 

13. The provisions of this order shall become effec- 
tive immediately except that the provisions of para- 
graph 10 hereof, and those of paragraph 11 to the 
extent that they relate to the functions referred to 
in paragraph 10, shall become effective on February 
24, 1947. 

Harry S. Truman. 

The White House, 

December 12, 1946. 

Executive Order 9841 (12 F. R. 2645) 

TERMINATION OF THE OFFICE OF TEMPORARY CONTROLS 

Whereas the Congress, in the Urgent Deficiency 
Appropriation Act, 1947, approved March 22, 1947, 
has declared its intent that the Office of Temporary 
Controls be closed and liquidated by June 30, 1947; 
and 

Whereas it is necessary to provide for the orderly 
liquidation of such Office and the disposition of its 
residual affairs: 

Now, therefore, by virture of the authority vested 
in me by the Constitution and Statutes, including the 
last paragraph of Title I of the First Supplemental 
Surplus Appropriation Rescission Act, 1946, approved 
February 18, 1946, Title III of the Second War 
Powers Act, 1942 as amended by the First Decontrol 



13 

Act of 1947, section 201 (b) of the Emergency Price 
Control Act of 1942, as amended, section 2 of the 
Stabilization Act of 1942, as amended, and Title I 
of the First War Powers Act, 1941, and as President 
of the United States, it is hereby ordered, in the in- 
terest of the internal management of the Government, 
as follows: 

Part I 

101. The Office of Temporary Controls, established 
by Executive Order No. 9809 of December 12, 1946, 
shall be terminated and disposition shall be made of 
its functions according to the provisions of this order. 

Part II 

201. The provisions of this Part shall become 
effective on May 4, 1947. 

202. Functions of the Temporary Controls Admin- 
istrator under the Emergency Price Control Act of 
1942, as amended, Executive Order No. 9809, and any 
other statute, order, or delegation are transferred 
as follows: 

(a) Functions with respect to rent control are 
transferred to the Housing Expediter and shall be 
performed by him or, subject to his direction and 
control, by such officers or agencies of the Govern- 
ment as he may designate. 

(b) Functions with respect to price control over 
rice are transferred to the Secretary of Agriculture 
and shall be performed by him or, subject to his 
direction and control, by such officers or agencies of 
the Department or Agriculture as he may designate. 

(c) Functions with respect to (1) subsidies, includ- 
ing determinations of the correct amounts of claims 
and the recovery of over-payments (but excluding 



14 

premium-payment functions transferred under para- 
graph 302 (b) hereof) ; (2) applications for price 
adjustments filed under Supplementary Order 9 and 
Procedural Regulation 6 (Adjustment of Maximum 
Prices for Commodities and Services under Govern- 
ment Contracts or Subcontracts, 7 P. R. 5087, 5444) 
of the Office of Price Administration; and (3) the 
interpretation and application of price and subsidy 
regulations and orders which affect the amount of 
subsidy payable ; are transferred to the Reconstruction 
Finance Corporation. 

203. The following functions of the Temporary 
Controls Administrator are transferred to the Secre- 
tary of Commerce and shall be performed by him or, 
subject to his direction and control, by such officers 
and agencies of the Department of Commerce as he 
may designate: 

(a) Functions of the President under Title III of 
the Second War Powers Act, 1942, as amended, vested 
in the Temporary Controls Administrator immedi- 
ately prior to the taking of effect of this Part. 

(b) Functions with respect to determining, under 
section 6 (a) of the Strategic and Critical Materials 
Stockpiling Act, the amount of strategic and critical 
materials necessary to make up any deficiency of the 
supply thereof for the current requirements of 
industry. 

(c) Functions under section 124 of the Internal 
Revenue Code, as amended. 

(d) Functions under section 12 of the act of June 
11, 1942 (the Small Business Mobilization Act). 

(e) Functions with respect to claims relating to the 
expansion of the capacity of defense plants when such 
expansion is alleged to have been undertaken at the 
request of the War Production Board or any of its 
predecessor agencies. 



15 

(f) Functions with respect to claims relating to 
property requisitioned by the Chairman of the War 
Production Board or by any of his predecessors. 

(g) Except as otherwise provided by statute or 
this or any other Executive order, all other functions 
of the Temporary Controls Administrator which were 
immediately prior to the taking of effect of Executive 
Order No. 9809 vested in the Civilian Production 
Administrator. 

204. Executive Order No. 9705 of March 15, 1946 
(as modified by Executive Orders Nos. 9762 and 9809) 
is revoked. 

205. Any authority vested in the Temporary Con- 
trols Administrator in pursuance of section 120 of 
the National Defense Act of 1916 (with respect to 
placing compulsory orders for products or materials) 
is withdrawn and terminated. 

Part III 

301. The provisions of this Part shall become 
effective June 1, 1947. 

302. All functions vested in the Temporary Con- 
trols Administrator by Executive Order No. 9809 not 
otherwise disposed of by statute or by this or any 
other Executive order are transferred to the Secretary 
of Commerce and shall be performed by him or, sub- 
ject to his direction and control, by such officers or 
agencies of the Department of Commerce as the Sec- 
retary may designate. Such functions shall include, 
but not be limited to, the following : 

(a) Functions of the President under the Stabili- 
zation Act of 1942, as amended, vested in the Tem- 
porary Controls Administrator immediately prior to 
the taking of effect of this Part. 

(b) Functions with respect to premium payments 
under section 2 (e) (a) (2) of the Emergency Price 



16 

Control Act of 1942, as amended, insofar as such 
payments relate to copper, lead, and zinc ores. 

(c) Fimctions with respect to the establishment of 
maximum prices for industrial alcohol sold to the 
Government or its agencies. 

(d) The liquidation of the functions of the Office 
of Temporary Controls and of the agencies thereof, 
except liquidation relating to functions specifically 
transferred to other agencies (by the provisions of 
this order or otherwise). 

303. The Office of Temporary Controls is 
terminated. 

Part IV 

401. The provisions of this Part shall become effec- 
tive, respectively, on the dates on which functions are 
transferred or otherwise vested by the provisions of 
this order. 

402. Fimctions under the Emergency Price Control 
Act of 1942, as amended, transferred under the pro- 
visions of this order shall be deemed to include au- 
thority on the part of each officer to whom such 
fimctions are transferred hereunder to institute, main- 
tain, or defend in his own name civil proceedings in 
any court (including the Emergency Court of Ap- 
peals), relating to the matters transferred to him, 
including any such proceedings pending on the effec- 
tive date of the transfer of any such function under 
this order. The provisions of this paragraph shall 
be subject to the provisions of the Executive order 
entitled "Conduct of Certain Litigation Arising 
Under Wartime Legislation, " issued on the date of 
this order and effective June 1, 1947. 

403. (a) The records, property, and personnel re- 
lating primarily to the respective functions trans- 
ferred under the provisions of this order shall be 



17 

transferred, and the funds relating primarily to such 
respective functions shall be transferred or other- 
wise made available, to the agencies to which such 
functions are transferred. Such measures and dis- 
positions as may be determined by the Direetor of the 
Bureau of the Budget to be necessary to effectuate 
the purposes and provisions of this paragraph shall 
be carried out in such manner as the Director may 
determine and by such agencies as he may designate, 
(b) In order that the confidential status of any 
records affected by this order shall be fully protected 
and maintained, the use of any confidential records 
transferred hereunder shall be so restricted by the 
respective agencies as to prevent the disclosure of 
information concerning individual persons or firms to 
persons who are not engaged in functions or activities 
to which such records are directly related, except as 
provided for by law or as required in the final dis- 
position thereof pursuant to law. 

404. All provisions of prior Executive orders in 
conflict with this order are amended accordingly. All 
other prior and currently effective orders, rules, regu- 
lations, directives, and other similar instruments 
relating to any function transferred by the provisions 
of this order or issued by any agency terminated here- 
under or by any predecessor or constituent agency 
thereof, shall remain in effect except as they are in- 
consistent herewith or are hereafter amended or re- 
voked under proper authority. 

405. As used in this order, "functions" includes 
powers, duties, authorities, discretions, and respon- 
sibilities. 

Haery S. Truman. 
The White House, 

April 23, 1947. 



APPENDIX B 

In the District Court of the United States for 
the District of Oregon 

Civil No. 3437 

Philip B. Fleming, Administrator, Office of Tem- 
porary Controls, plaintiff 

vs. 

Mrs. T. A. Findlay and Reuben G. Lenske, 

defendants 

< 

MEMORANDUM opinion 

I am dismissing this case which is one of several 
that have recently been filed so that the authority of 
General Fleming can be tested in an appellate court, 
if that is OPA's wish. 

I am dismissing the case on jurisdictional grounds 
which are said always to justify a Court's acting on 
its own motion. I am dismissing it for the following 
specific reasons: 

The Price Control Act was enacted in 1942. The 
Act put the national government into a domestic field 
never before entered. The field w T as entered as a war 
measure. The Act provided that the great new federal 
powers thus asserted should be exercised by an ad- 
ministrator appointed by the President "by and with 
the advice and consent of the Senate. " Four Admin- 
istrators were thus appointed and confirmed. 

Now it is said and while still purported to exercise 
war powers, that the President can put these great — 
and to many under present conditions, questionable 

(18) 



19 

powers — in the hands of an executive not confirmed 
nor to be confirmed by the Senate. 

The President's action cannot be upheld, in my 
opinion, without doing violence to constitutional prin- 
ciple. Ours is a government of divided powers and 
the outstanding domestic problem of the hour is to re- 
store constitutional equilibrium. It is being found 
more difficult, I think, to regain war powers than 
had been expected. I put my judgment and cast 
my influence in the present situation on the side of 
diminution of extraordinary executive power rather 
than on the side of expansion of it, for it is obvious 
if the President can appoint a price and rent admin- 
istrator now without consulting the Senate, he could 
have done so at any time during the war. 

Dated at Portland, Oregon, this 15th day of Feb- 
ruary 1947. 

(S) Claude McColloch, 

District Judge. 



U. S. GOVERNMENT PRINTING OFFICE: 1947 



No. 11671 

(Hmteb States 

Circuit Court of Sppeate 

Jfor tfje Jlintfj Circuit 



UNITED STATES OF AMERICA, 

Appellant, 



vs. 



SHOFNER IRON AND STEEL WORKS, a Cor- 
poration, 

Appellee. 



Gfamtfcript of &ecorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



i947 

PAUL P. O'BRIEN. 






Rotary Colorprint, 870 Brannan Street, San Francisco 7-21-47 — 60 



No. 11671 

Umteb States 

Circuit Court of Sppeate 

Jfor tfce Jlinti) Circuit 



UNITED STATES OP AMERICA, 

Appellant, 



vs. 



SHOFNER IRON AND STEEL WORKS, a Cor- 
poration, 

Appellee. 



tErangcript of &ecorb 



Upon Appeal from the District Court of the United States 
for the District of Oregon 



Rotary Colorprint, 870 Brannan Street, Son Francisco 7-21-47 — 6<r 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record 
are printed literally in italic; and, likewise, cancelled matter appear- 
ing in the original certified record is printed and cancelled herein 
accordingly. When possible, an omission from the text is indicated by 
printing in italic the two words between which the omission seems to 
occur.] 

PAGE 

Amended Complaint 16 

Affidavit of Chester A. Sheppard 10 

Appeal : 

Notice of 30 

Statement of Points to be Relied Upon on 32 

Designation of Record on 33 

Statement of Points and Designation of 
Portions of Record to be Printed Upon 45 

Certificate of Clerk 37, 44 

Complaint 2 

Decision 39 

Decision on Motion to Amend Order of Feb- 
ruary 15, 1947 25 

Designation of Record 33 

Docket Entries 35 

Motion for Order to Serve Reconstruction 
Finance Corporation 9 

Motion for Dismissal 23 

Motion for Order of Dismissal 28 



INDEX PAGE 

Motion to Amend Order 25 

Names and Addresses of Attorneys of Record 1 

Notice of Appeal 30 

Order Granting Extension of Time 31 

Order That Defendant's Motion be Denied .... 15 

Order That Motion be Denied 28 

Order in Re Opinion 23 

der Dismissing First Cause of Action 24 

Order Dismissing Second Cause of Action .... 29 

Return of Service of Writ 8 

Statement of Points and Designation of Por- 
tions of Record to be Printed 39 

Statement of Points to be Relied Upon on 

Appeal 32 

Summons in a Civil Action 7 



NAMES AND ADDRESSES OF ATTORNEYS 

OF RECORD 

HENRY L. HESS, 

U. S. Attorney. 

J. ROBERT PATTERSON and 
VICTOR E. HARR, 

Assistant U. S. Attorneys, 
r. S. Court House, 
Portland, Oregon. 

A. DEVITT VANECH, 

Asst. Atty. Gen'l. 

ROGER P. MARQUIS and 
WILMA C. MARTIN, 

Dept. of Justice, 

Washington, D. C, 
For Appellant. 

ALBERT M. HODLER and 
MacCORMAC SNOW, 

Pacific Bldg., 
Portland, Oregon. 

W. K. PHILLIPS and 

SHEPPARD & PHILLIPS, 

Public Service Bldg., 
Portland, Oregon, 
For Appellee. 



2 United States of America vs. 

In the District Court of the United States 
for the District of Oregon 

Civil No. 3224 

UNITED STATES OF AMERICA, 

Plaintiff, 
vs. 

SHOFNER IRON AND STEEL WORKS, 

Defendant. 

COMPLAINT 

The United States of America, by Henry L. Hess, 
United States Attorney for the District of Oregon, 
and J. Robert Patterson, Assistant United States 
Attorney, for its cause of action, says: 

I. 

This is a civil action brought by the United States 
and this Court has jurisdiction under Section 24(1) 
of the Judicial Code, 28 U.S.C. 41(1). 

II. 

Defendant is a corporation organized under the 
laws of the State of Oregon and authorized to do 
business in the State of Oregon. 

III. 

On or about September, 1942, in contemplation 
of acquisition of the lands hereinafter described by 
the Defense Plant Corporation, a wholly owned 
governmental corporation, said Defense Plant Cor- 
poration entered into an agreement of lease with de- 



Shofner Iron and Steel Works 3 

fendant, whereby Defense Plant Corporation agreed 
to and did lease to said defendant the followin 
described property situated in the State of Oregon, 
County of Multnomah : 

"Tract 1: Beginning at a point on the 
northeasterly line of N. W. Yeon Avenue where 
it intersects the division line between tracts "C 
and "D M as shown upon the map of the estate 
of Peter Guild, deceased, as divided among the 
heirs, pursuant to decree of partition entered 
February 28, 1873, in Journal 8, page 640, J.R. 
4508, and recorded in Deed Book X, page 56; 
thence south 47° 00' east along the said north - 
easterly line of N. W. Yeon Avenue, 235.24' to 
the most westerly corner of that certain tract 
of land conveyed to the United States of Amer- 
ica bv deed recorded March 5, 1937, in P. S. 
Book 380, page 437; thence north 40° 51' east 
along the northwesterly line of said tract 109.1 
feet to the true point of beginning of the tract 
to be described; running thence north 40° 51' 
east 186.77 feet, more or less, to the most north- 
erly corner of that certain [1*] 30-foot ease- 
ment heretofore conveyed to the United States 
of America by deed dated March 3, 1937, re- 
corded in P.S. Deed Book 380, page 437, on 
March 5, 1937 ; thence southeasterly to the most 
westerly corner of that certain tract of land 
conveyed to Portland Linseed Oil Company by 
deed recorded July 7, 1888, in Deed Book 103, 



* Page numbering appearing at foot of page of original certified 
Transcript of Record. 



4 United States of America vs. 

page 450; thence north 40° 51' east, along the 
northwesterly boundary line of the Portland 
Linseed Oil Company tract, 106.24 feet to the 
most northerly corner of said tract and in the 
southwesterly line of the Northern Pacific Rail- 
way Company's right of way; thence north 48° 
43' west along said line of right of way, 152.75 
feet; thence south 42° 45' west 282.07 feet; 
thence south 47° 00' east 124.76 feet to the place 
of beginning." 

IV. 

In accordance with the terms of said lease, De- 
fense Plant Corporation acquired title to the fore- 
going described property from Shofner Iron & Steel 
Works by deed dated January 30, 1943, recorded 
as Document 2508 in Book 730 at page 329. 

V. 

Pursuant to the Act of June 30, 1945, 59 Stat. 
310, Reconstruction Finance Corporation, on July 
1, 1945, succeeded to all right, title and interest of 
Defense Plant Corporation in the aforesaid land 
and to all rights of said Defense Plant Corporation 
under said lease. Thereafter, said lease was duly 
terminated, in accordance with its terms, by Recon- 
struction Finance Corporation, said termination be- 
coming effective as of December 5, 1945. 

VI. 

Two interim consent agreements were thereafter 
executed by Reconstruction Finance Corporation 



Shofncr Iron and Steel Works 5 

whereby defendant was permitted to remain in pos- 
session until May 15, 1946. Since May 15, 1946, 
defendant has remained in possession of said premi- 
ses without authority, right, title or interest. 

VII. 

On May 24, 1946, Reconstruction Finance Corpo- 
ration declared said premises and facilities surplus, 
pursuant to the Surplus Property Act of October 
3, 1944, 58 Stat. 865, as amended, and, pursuant to 
said Act as amended and regulations thereunder, did 
transfer jurisdiction of said premises to the War 
Assets Administration, an administrative agency of 
the pontiff, established by Executive Order 9689, 
dated January 31, 1946. [2] 

VIII. 

Plaintiff is entitled to the possession of said prem- 
ises and, although defendant has no right, title 
or interest therein, nor the right to possession 
thereof, said defendant is unlawfully and wrong- 
fully withholding possession of the aforesaid premi- 
ses from the plaintiff. 

Wherefore, plaintiff prays judgment against de- 
fendant for possession of said real estate, for its 
costs, and for such further relief as may be proper 
and necessary. 

HENRY L. HESS, 

United States Attorney for 
the District of Oregon. 

/s/ J. ROBERT PATTERSON, 

Asst. United States Attorney. 



6 United States of America vs. 

United States of America, 
District of Oregon — ss. 

I, J. Robert Patterson, being first duly sworn, 
depose and say: That I am a duly appointed, quali- 
fied and acting Assistant United States Attorney 
for the District of Oregon; that I am possessed of 
information concerning the above-named defendant, 
from which I have prepared the foregoing Com- 
plaint, and that the allegations contained in said 
Complaint are true, as I verily believe. 

/s/ J. ROBERT PATTERSON. 
Subscribed and sworn to before me this 12th day 
of August, 1946. 

[Seal] LOWELL MUNDORFF, 

Clerk of the District Court of the LTnited States for 
the District of Oregon. 

By /s/ H. S. KENYON, 
Deputy. 

[Endorsed] : Filed August 12, 1946. [3] 



Shofncr I roii and Steel Works 7 

District Court of the Tinted States for the 
District of Oregon 

Civil Action File No. 3224 

UNITED STATES OF AMERICA, 

Plaintiff, 

vs. 

SHOFNER IRON AND STEEL WORKS, 

Defendant. 

SUMMONS IN A CIVIL ACTION 

To the above-named Defendant: i • . . • .. ■ 

You ar& hereby summoned and required to appear 
and defend this action and to serve upon Henry 
L. Hess, U. S. Attorney; and J. Robert Patterson, 
Assistant U. S. Attorney, plaintiff's attorney, whose 
address is U. S. Court House, Portland, Oregon, an 
answer to the complaint which is herewith served 
upon you, within twenty days after service of this 
summons upon you, exclusive of the day of service. 
If you fail to do so, judgment by default will be 
taken against you for the relief demanded in the 
complaint. 

Date : August 13, 1946. 

[Seal] LOWELL MUNDORFF, 

Clerk of Court. 

By /s/ F. L. BUCK, 

Chief Deputy Clerk. 



8 United States of America vs. 

RETURN OF SERVICE OF WRIT 

I hereby certify and return, that on the 14th day 
of Aug., 1946, I received the within summons & 
complaint and on that date served C. A. Shepherd, 
President of Shofner Iron Works. 

/s/ JACK R. CAUFIELD, 

United States Marshal. 

By /s/ FRANK L. MEYER, 

Deputy United States 
Marshal. 

[Endorsed] : Filed August 19, 1946. [4] 



Shofm r Iron and Steel Works 9 

[Title of District Court and ( Jause.] 

MOTION 

Comes now the defendant and based upon the 
affidavit of Chester A. Sheppard, moves this court 
for an order for leave to serve the Reconstruction 
Finance Corporation, an agency of the United States 
of America, with a third party complaint and sum- 
mons in order that the defendant may be permit- 
ted to assert a counter-claim in the above-entitled 
action for the purpose of having the entire matter 
adjudicated in one cause. 

This motion is based on Rule 14, Rule 17, subdi- 
vision A, and Rule 13, subdivision D, of Federal 
Rules of Civil Procedure. 

/s/ ALBERT M. HODLER, 

/s/ W. K. PHILLIPS, 

Attorneys for Defendant. 

Due service of the foregoing Motion by copy as 
prescribed by law is hereby admitted, at Portland, 
Oregon, this 13th day of September, 1946. 

/s/ J. ROBERT PATTERSON, 

Attorney for Plaintiff. 

[Endorsed] : Filed September 13, 1946. [5] 



10 United States of America vs. 

[Title of District Court and Cause.] 

AFFIDAVIT OF CHESTER A. SHEPPARD 

State of Oregon, 

County of Multnomah — ss. 

I, Chester A. Sheppard, being first duly sworn, 
depose and say : 

That Shofner Iron & Steel Works is a corporation 
duly organized and existing under the general in- 
corporation laws of the State of Oregon; 

That on or about August 1, 1944, your affiant was 
elected president of the Shofner Iron & Steel Works, 
and has been the president of said corporation ever 
since said time ; 

That the Defense Plant Corporation was, at the 
time of the execution of the lease agreement men- 
tioned in the complaint, a corporation duly organ- 
ized and existing under and by virtue of the laws 
of the United States, having been created by the 
Reconstruction Finance Corporation; and that said 
Defense Plant Corporation was dissolved July 1, 
1945, and all of its assets were transferred to and 
all of its functions, powers and duties and authority 
were assumed by the Reconstruction Finance Cor- 
poration ; 

That on or about September, 1942, the Defense 
Plant Corporation acquired the tract of land de- 
scribed in plaintiff's [6] complaint, which tract of 
land is immediately adjoining and contiguous to a 



Shofner Iron and Steel Works 11 

tract of land owned by the defendant; that immedi- 
ately after acquiring said tract of land, the Defense 
Plant Corporation, through its duly authorized 
agents, erected and constructed a foundry building 
upon the tract of land described in plaintiff's com- 
plaint, and said Defense Plant Corporation caused 
appropriate foundry machinery to be installed in 
said building located on said premises; that there- 
after the Defense Plant Corporation entered into 
an agreement of lease with the defendant wherein 
and whereby the Defense Plant Corporation agreed 
to and did lease to said defendant the real property 
described in plaintiff's complaint; 

That on or about July 1, 1945, the Reconstruc- 
tion Finance Corporation succeeded to all the right, 
title and interest of the Defense Plant Corporation 
in the land described in plaintiff's complaint, and 
thereafter, on December 5, 1945, the Reconstruction 
Finance Corporation terminated the said lease. 

That thereafter the Reconstruction Finance Cor- 
poration gave permission to the Shofner Iron & 
Steel Works to use and occupy the said premises 
created by the Defense Plant Corporation, condi- 
tioned that Shofner Iron & Steel Works would keep 
and perform certain conditions and stipulations 
made by the Reconstruction Finance Corporation ; 
that one of said conditions was that the Shofner 
Iron & Steel Works should carry fire insurance 
and public liability insurance on its building and 
properties, said insurance to be made payable to 
the Reconstruction Finance Corporation; and that 



12 United States of America vs. 

ever since said agreements were entered into be- 
tween the Shofner Iron & Steel Works and the 
Reconstruction Finance Corporation, the Shofner 
Iron & Steel Works has secured and paid for fire 
insurance and public liability insurance payable to 
the [7] Reconstruction Finance Corporation, all in 
accordance with their said agreement, and said poli- 
cies of insurance have been retained and are now 
held and enjoyed by the Reconstruction Finance 
Corporation. 

Further, affiant says that the Shofner Iron & 
Steel Works has a good, valid and legal claim for 
breach of contract against the Reconstruction Fi- 
nance Corporation which should be determined in 
this lawsuit; that said claim against the Reconstruc- 
tion Finance Corporation arises out of an agreement 
entered into between the Defense Plant Corpora- 
tion and Shofner Iron & Steel Works, by the terms 
of which agreement the Defense Plant Corporation 
agreed, in the latter part of the year 1944, to make 
certain changes in its plant according to plans and 
specifications prepared by the Shofner Iron & Steel 
Works; that said plans and specifications called for 
the expenditure of $103,000.00. That at the time said 
agreement was entered into, the war in the Pacific 
was at its height and the combined facilities of the 
Shofner foundry and the Defense Plant foundry 
were insufficient to produce the castings required 
by the Army and the Navy, and the Defense Plant 
Corporation was anxious to have its facilities in- 
creased to the end that steel castings might be 



Shofner Iron and Stei I Works 13 

promptly furnished to the Army and the Navy; 
that at said time the combined capacity of the plant 
of the Defense Plant Corporation and the Shofner 
plant was approximately 200 tons per month, and it 
was desirable and necessary that said capacity be 
increased from 200 tons per month to between 350 
and 400 tons per month; that the Defense Plant 
Corporation required the Shofner Iron & Steel 
Works to prepare plans and specifications for said 
changes, and that Shofner Iron & Steel Works 
did prepare plans and specifications showing what 
changes were necessary in order to increase pro- 
duction; that thereupon the Defense Plant Cor- 
poration [8] required the Shofner Iron & Steel 
Works to get the approval of the War Production 
Board, the Steel Division and the Facilities Divi- 
sion, before it proceeded with the said changes ; that 
Shofner Iron & Steel Works did get the approval 
of the Steel Division and the Facilities Division of 
the War Production Board, and turned said 
approval over to the Defense Plant Corporation; 
that upon receipt of said approval, and prior 
thereto, the Defense Plant Corporation promised 
and agreed to promptly make the changes requested 
in the plans and specifications so prepared ; that the 
Defense Plant Corporation never at any time made 
any of the changes recommended or approved, which 
failure on the part of the Defense Plant Corpo- 
ration injured and damaged the Shofner Iron & 
Steel Works more than $250,000.00. 

Affiant says that the Reconstruction Finance Cor- 



14 United States of America vs. 

poration should be brought into this litigation for 
the further reason that Shofner Iron & Steel Works 
has other rights and claims against the Reconstruc- 
tion Finance Corporation that cannot be determined 
in this litigation without the presence of the Re- 
construction Finance Corporation. 

Further affiant sayeth naught, except that this 
affidavit is made in support of the motion to which 
this affidavit is attached. 

/s/ CHESTER A. SHEPPARD. 

Subscribed and sworn to before me this 12th day 
of September, 1946. 

[Seal] CARRIE BELLE CANN, 

Notary Public for Oregon. 

My Commission expires August 28, 1949. [9] 



Shofner Iron and Steel Works 15 

[Title of District Court and Cause.] 

ORDER 

This matter coming on to be heard before the 
undersigned judge of the above-entitled Court on 
the defendant's motion for leave to serve the Re- 
construction Finance Corporation with a third party 
complaint and summons, the plaintiff appearing by 
Henry L. Hess, United States Attorney, and J. 
Robert Patterson, Assistant United States Attor- 
ney, and the defer dant appearing by its attorneys, 
Albert M. Hodler and W. K. Phillips, the Court 
having heard the argument of both parties and hav- 
ing considered the briefs submitted on behalf of 
both parties and being fully advised, 

It Is Therefore Ordered that the defendant's mo- 
tion be and the same is hereby denied and the de- 
fendant is «iven ten (10) days within which to 
appear further in this cause. 

Dated at Portland, Oregon, this 15th day of No- 
vember, 1946. 

/s/ CLAUDE McCULLOCH, 
District Judge. 

[Endorsed] : Filed November 15, 1946. [10] 



16 United States of America vs. 

[Title of District Court and Cause.] 

AMENDED COMPLAINT 

The United States of America, by Henry L. Hess, 
United States Attorney for the District of Oregon, 
and J. Robert Patterson, Assistant United States 
Attorney, for its cause of action says: 

I. 

This is a civil action brought by the United States 
and this Court has jurisdiction under Section 24(1) 
of the Judicial Code, 28 U.S.C. 41(1). 

II. 

Defendant is a corporation organized under the 
laws of the State of Oregon and authorized to do 
business in the State of Oregon. 

III. 

On or about September, 1942, in contemplation of 
acquisition of the lands hereinafter described by 
the Defense Plant Corporation, a wholly owned 
governmental corporation, said Defense Plant Cor- 
poration entered into an agreement of lease with 
defendant, whereby Defense Plant Corporation 
agreed to and did lease to said defendant the follow- 
ing described property situated in the State of Ore- 
gon, County of Multnomah : 

"Tract 1: Beginning at a point on the 
northeasterly line of N.W. Yeon Avenue where 
it intersects the division line between tracts "C" 
and "D" as shown upon the map of the Estate 



Shofner Iron and Steel Works 17 

of Peter Guild, deceased, as divided among the 
heirs, pursuant to decree of partition entered 
February 28, 1873, in Journal 8, page 640, J.R. 
4508, and recorded in Deed Book X, page 56; 
thence south 47° 00' east along the said north- 
easterly line of N.W. Yeon Avenue, 235.24' to 
the most westerly corner of that certain tract of 
land conveyed to the United States of America 
by deed recorded March 5, 1937, in P. S. Book 
380, page 437; thence north 40° 51' east along 
the northwesteriv line of said tract 109.1 feet 
to the true point of beginning of the tract to be 
described; running thence north 40° 51' east 
186.77 feet, more or less, to the most northerly 
corner of that certain [11] 30-foot easement 
heretofore conveved to the United States of 
America by deed dated March 3, 1937, recorded 
in P.S. Deed Book 380, page 437, on March 5, 
1937; thence southeasterly to the most westerly 
corner of that certain tract of land conveyed 
to Portland Linseed Oil Company by deed re- 
corded July 7, 1888, in Deed Book 103, page 
450; thence north 40° 51' east, along the north- 
westerly boundary line of the Portland Linseed 
Oil Company tract, 106.24 feet to the most 
northerly corner of said tract and in the south- 
westerly line of the Northern Pacific Railway 
Company's right of way; thence north 48° 43' 
west along said line of right of way, 152.75 feet ; 
thence south 42° 45' west 282.07 feet; thence 
south 47° 00' east 124.76 feet to the place of 
beginning." 



18 United States of America vs. 

IV. 

In accordance with the terms of said lease, De- 
fense Plant Corporation acquired title to the fore- 
going described property from Shofner Iron & Steel 
Works by deed dated January 30, 1943, recorded as 
Document 2508 in Book 730 at Page 329. 

V. 

Pursuant to the Act of June 30, 1945, 59 Stat. 310, 
Reconstruction Finance Corporation, on July 1, 
1945, succeeded to all right, title and interest of 
Defense Plant Corporation in the aforesaid land 
and to all rights of said Defense Plant Corpora- 
tion under said lease. Thereafter, said lease was 
duly terminated, in accordance with its terms, by 
Reconstruction Finance Corporation, said termi- 
nation becoming effective as of December 5, 1945. 

VI. 

Two interim consent agreements were thereafter 
executed by Reconstruction Finance Corporation 
whereby defendant was permitted to remain in pos- 
session until May 15, 1946. Since May 15, 1946, de- 
fendant has remained in possession of said premi- 
ses without authority, right, title or interest. 

VII. 

On May 24, 1946, Reconstruction Finance Cor- 
poration declared said premises and facilities sur- 
plus, pursuant to the Surplus Property Act of Oc- 
tober 3, 1944, 58 Stat. 865, as amended, and, pur- 
suant to said Act as amended and regulations there- 



Shofner Iron and Steel Works 19 

under, did transfer jurisdiction of said premises to 
the War Assets Administration, an administrative 
agency of the plaintiff, established by Executive Or- 
der No. 9689. dated January 31, 1946. [12] 

VIII. 

Plaintiff is entitled to the possession of said prem- 
ises and, although defendant has no right, title or 
interest therein, nor the right to possession thereof, 
said defendant is unlawfully and wrongfully with- 
holding possession of the aforesaid premises from 
the plaintiff. 

For a second cause of action, plaintiff complains 
and alleges : 

I. 

Plaintiff refers to and corporates by reference 
in his second cause of action paragraphs one and 
two of the plaintiff's first cause of action. 

II. 

That on or about the 28th day of September, 1943, 
the defendant by a written agreement of lease with 
plaintiff, agreed to and did lease to the said plaintiff 
the following described property situated in the 
State of Oregon, County of Multnomah : 

Parcel 1 — Beginning at the intersection of 
the Northeasterly line of N.W. Yeon Avenue 
with the division line between Tracts and 1) 
as shown upon the map of the estate of Peter 
Guild, deceased, as divided among the heirs pur- 



20 United States of America vs. 

suant to decree of partition entered February 
28, 1873, Journal 8, page 640, J.R. 4508 and 
recorded in Deed Book X, page 56, Records of 
Deeds of Multnomah County, Oregon: thence 
South 47° 00' East along said Northeasterly line 
of N.W. Yeon Avenue 110.48 feet; thence North 
40° 51' East 109.1 feet to the most Southwest- 
erly corner of the property now owned by the 
Defense Plant Corporation; thence North 40° 
51' East 10.9 feet along the Northwesterly boun- 
dary of the property now owned by the Defense 
Plant Corporation; thence North 47° 00' West 
150 feet ; thence South 40° 51' West 120 feet to 
the said Northeasterly line of N. W. Yeon Ave- 
nue ; thence South 47° 00' East 39.52 feet to the 
place of beginning. 

Parcel 2 — Beginning at the intersection of the 
Northeasterly line of N.W. Yeon Avenue, with 
the division line between Tracts C and D as 
shown upon the map of the estate of Peter 
Guild, deceased, as divided among the heirs, 
pursuant to decree of partition entered Febru- 
ary 28, 1873, Journal 8, Page 640, J.R. 4508, 
and recorded in Deed Book X, page 56 ; thence 
North 47° 00' West 39.52 feet to the true point 
of beginning; thence North 40° 51' East 120 
feet ; thence South 47° 00' East 150 feet to the 
Northwesterly boundary of that property now 
owned by the Defense Plant Corporation; 
thence North 42° 45' East 89.1 feet; thence 
North 47° 00' West 288.30 feet; thence South 
40° 51' West 209.10 feet to the Northerly line 



Shofnerlron and Steel Works 21 

of X.W. YeoD Avenue; thence South 47° 00' 
Easl 138.30 feet to the true point of beginning. 

III. 

By the terms of the said lease, the defendant 
leased to the plaintiff the said property Prom the 
28th day of September 1943 to and including the 

23rd day of March 1963, and that the plaintiff had 
complied with all the conditions of the said lease 
and that the plaintiff is entitled to the possession 
of the said premises and although defendant has 
no right to the possession thereof, said defendant is 
unlawfully, and wrongfully, withholding possession 
of the aforesaid property from the plaintiff. 

Wherefore. Plaintiff prays judgment against the 
defendant for possession of the said real estate, and 
for costs and disbursements incurred herein, and for 
such further relief as may be proper and necessary. 

HENRY L. HESS, 

United States Attorney for 
the District of Oregon. 

/s/ J. ROBERT PATTERSON, 
Assistant United States 
Attorney. 

United States of America, 
District of Oregon — ss. 

I, J. Robert Patterson, being first duly sworn, 
depose and say: That I am a duly appointed, quali- 
fied and acting Assistant United States Attorney 
for the District of Oregon; that I am possessed 
information concerning the above-named defendant. 



22 United States of America vs. 

from which I have prepared the foregoing Com- 
plaint, and that the allegations contained in said 
Complaint are true, as I verily believe. 

/s/ J. ROBERT PATTERSON. 

Subscribed and sworn to before me this 26th day 
of November, 1946. 

LOWELL MUNDORFF, 

Clerk of the District Court of the United States for 
the District of Oregon. 

By /s/ H. S. KENYON, 
Deputy. [14] 

United States of America, 
District of Oregon — ss. 

I, J. Robert Patterson, Assistant United States 
Attorney for the District of Oregon, hereby certify 
that I have made service of the foregoing Amended 
Complaint, Civil No. 3224, by depositing in the 
United States Post Office at Portland, Oregon on 
the 26th day of November, 1946, duly certified copies 
thereof, enclosed in envelopes, with postage thereon 
prepaid, addressed to Albert M. Hodler, Attorney 
at Law, 1208 Public Service Building, Portland, 
Oregon and MacCormac Snow 7 , Attorney at Law, 
Pacific Building, Portland, Oregon, Attorneys for 
the Defendant. 

/s/ J. ROBERT PATTERSON, 

Assistant United States 
Attorney. 

[Endorsed] : Filed November 26, 1946. [15] 



!3 



Shofncr Iron and Steel Works 
[Title of District Court and Cause.] 

MOTION 

Comes the defendant and moves the above entitled 
court for the dismissal of the above entitled cause 
or in the alternate for the striking from the files 
thereof of the complaint and the amended complaint. 

The ground of this motion is that neither the 
complaint nor the amended complaint states a claim 
on which relief can be granted (F.R.C.P. 12-B-6) 
and for the reason that the plaintiff is not the real 
party in interest. (F.R.C.P. 17- A) 

/s/ MacCORMAC SNOW, 
/s/ ALBERT M. HODLER, 

Attorneys for Defendant. 

Service of the within motion is admitted this 5th 
day of December, 1946. 

/s/ VICTOR E. HARR, 

Of Attorneys for Plaintiff. 

[Endorsed] : Filed December 5, 1946. [16] 



[Title of District Court and Cause.] 

ORDER IN RE OPINION 

The Court hands down its opinion and directs 
that an order be prepared in accordance therewith. 
February 6, 1947. [17] 



24 United States of America vs. 

[Title of District Court and Cause.] 

ORDER 

This cause coming on to be heard on the motion 
of defendant for dismissal of the above-entitled 
cause or in the alternate for the striking from the 
files thereof of the complaint and the amended com- 
plaint, and the court having heard the argument 
of counsel for the parties and examined briefs on 
behalf of the parties, now therefore it is 

Considered and Ordered as follows: 

1. The first cause of action alleged in the 
amended complaint shall be and is hereby dis- 
missed and said first cause of action is stricken 
from the files. 

2. The said motion is denied with respect to 
the original complaint. 

3. The said motion is denied with respect 
to the second cause of action alleged in the 
amended complaint. 

Dated this 13 day of February, 1947. 

/s/ R. LEWIS BROWN, 
Judge. 

Portland, Ore. Approved as to form, Feb. 11, 
1947. 

J. ROBERT PATTERSON, 
Ass't. U, S. Attorney. 

[Endorsed]: Piled February 15, 1947. [18] 



Shofncr Iron and Steel Works 25 

[Title of District Court and Cause.] 

MOTION 

Comes now the Plaintiff by Henry L. Hess, United 
States Attorney for the District of Oregon, and J. 
Robert Patterson, Assistant United States Attor- 
ney, and moves the Court to amend that certain 
Order entered in the above entitled cause on the 
15th day of February, 1947, so as to provide and 
grant the Plaintiff five days within which to file 
its amended Complaint, naming the Reconstruction 
Finance Corporation as a party plaintiff in this 
cause. 

Dated at Portland, Oregon, this 19th day of Feb- 
ruary, 1947. 

HENRY L. HESS, 

United States Attorney for 
the District of Oregon. 

/s/ J. ROBERT PATTERSON, 

Asst. United States Attorney. 

[Affidavit of service by mail attached.] 

[Endorsed] : Filed February 19, 1947. [19] 



[Title of District Court and Cause.] 

DECISION ON MOTION TO AMEND ORDER 
OF FEBRUARY 15, 1947 

Plaintiff moves the Court as follows: Comes now 
the Plaintiff by Henry L. Hess, United States Attor- 
ney for the District of Oregon, and J. Robert Pat- 



26 United States of America vs. 

terson, Assistant United States Attorney, and moves 
the Court to amend that certain Order entered in 
the above entitled cause on the 15th day of Febru- 
ary, 1947, so as to provide and grant the Plaintiff 
five days within which to file its amended Com- 
plaint, naming the Reconstruction Finance Corpora- 
tion as a party plaintiff in this cause. 

The Order referred to in the motion after the 
entitlement of court and cause is as follows: "This 
cause coming on to be heard on the motion of de- 
fendant for dismissal of the above entitled cause or 
in the alternate for the striking from the files 
thereof of the complaint and the amended com- 
plaint, and the court having heard the argument 
of counsel for the parties' and examined briefs on 
behalf of the parties, now therefore it is 

"Considered and Ordered as follows: 

"1.; The first cause of action alleged in the 
amended complaint shall be and is hereby dis- 
missed and [20] said first cause of action is 
stricken from the files. 

"2. The said motion is denied with respect 
to the original complaint. 

"3. The said motion is denied with respect 
to the second cause of action alleged in the 
amended complaint. 

"Dated this 13 day of February, 1947. 

" Signed R. Lewis Brown, Judge." 

Paragraph No. 1 of said Order is a final decision 
and is appealable. Wright v. Gibson, 9 Cir., 128 F. 
2d 865. 



Shofncr Iron and Steel Works 27 

The motion before the Court is in effect an appli- 
cation to amend a judgment and does not set forth 
a ground or reason for the modification or amend- 
ment asked, and is not an application for a mere 
formal or clerical amendment based on matters ap- 
pearing in the record. 

Judge McColloeh, by Order of November 15, 1946, 
in this cause, denied a motion by defendant to serve 
Reconstruction Finance Corporation with a third 
party complaint and summons, said motion hav- 
ing been opposed by plaintiff. 

Finally, even if the power to do so exists, I am 
reluctant to amend, modify or otherwise disturb 
orders of Judge Brown and Judge McColloeh ap- 
pearing in the files and records of this case. 

Plaintiff's motion to amend that certain Order in 
the above entitled cause entered on the 15th day 
of February, 1947, is denied. 

Dated : This 6th day of March, 1947. 
/s/ ROGER T. FOLEY, 

United States District Judge. 

[Endorsed] : Filed March 6, 1947. [21] 



28 United States of America vs. 

[Title of District Court and Cause.] 

ORDER 

This cause coming on to be heard on the motion of 
the plaintiff for the allowance of time within which 
to file its amended complaint naming Reconstruction 
Finance Corporation as a party plaintiff, and the 
court having heard the arguments of the parties and 
being fully advised, 

Now, Therefore It Is Considered and Ordered, 
that the said motion be and the same is hereby 
denied. 

Dated this 11th day of March, 1947. 

/s/ ROGER FOLEY, 

Judge. 

Endorsed : 

Filed March 11, 1947. [22] 



[Title of District Court and Cause.] 

MOTION 

Comes Now Plaintiff above named by and through 
Henry L. Hess, United States Attorney for the Dis- 
trict of Oregon and Victor E. Harr, Assistant 
United States Attorney and moves the Court for an 
order of Dismissal without prejudice of the second 
cause of action of the Plaintiff's amended complaint 
in the above entitled Court and cause. 



Shofncr Iron and Steel Works 29 

Dated at Portland, Oregon tins 14th day of March, 
1947. 

HENRY L. HESS, 

United States Attorney for 
the District of Oregon. 

/s/ VICTOR E. HARR, 

Asst. United States Attorney. 

United States of America, 
District of Oregon — ss. 

Service of the within Motion is hereby accepted 
within the State and District of Oregon, on the 
14th day of March, 1947 by receiving a copy thereof 
duly certified to as a true and correct copy of the 
original by Victor E. Harr, Assistant United States 
Attorney for the District of Oregon. 

/s/ MacCORMAC SNOW, 

Attorney for Defendant. 

Endorsed : 

Filed March 17, 1947. [23] 



[Title of District Court and Cause.] 

ORDER 

This matter coming on to be heard upon motion 
of plaintiff for an order of dismissal without preju- 
dice of the second cause of action and the Court 
having considered said motion and being fully 
advised ; 



30 United States of America vs. 

It Is Ordered that the plaintiffs second cause of 
action in plaintiff's amended complaint in the above 
entitled Court and cause be and the same is hereby 
dismissed without prejudice. 

Dated at Portland, Oregon, this 17th day of 
March, 1947. 

/s/ CLAUDE McCOLLOCH, 
Judge. 

Endorsed : 

Filed March 17, 1947. [24] 



[Title of District Court and Cause.] 

NOTICE OF APPEAL 

To: Shpfner Iron and Steel Works, Defendant 
above named, Portland, Oregon, and Sheppard 
& Phillips, Attorneys for Defendant: 

You and each of you will please take notice that 
the Plaintiff, United States of America, appeals to 
the Circuit Court of Appeals for the Ninth Circuit, 
from the Decision of District Judge R. Lewis 
P>rown, rendered February 6, 1947. 

HENRY L. HESS, 

United States Attorney for 
the District of Oregon. 

/s/ VICTOR E. HARR, 

Asst. United States Attorney. 



Shofncr Iron and Steel Works 31 

United States of America, 
District of Oregon — ss. 

Service of the within Notice of Appeal is hereby 
accepted within the State and District of Oregon, 
on the 2nd day of May. 1947, by receiving a copy 
thereof duly certified to as a true and correct copy 
of the original by Victor E. Harr, Assistant United 
States Attorney for the District of Oregon. 

SHEPPARD & PHILLIPS, 
Of Attorneys for Defendant, by 
DS. 
Endorsed : 
Piled May 2, 1947. [25] 



[Title of District Court and Cause.] 

ORDER 

This Matter coming on to be heard before the 
undersigned Judge of the above entitled court, on 
the Motion of the Plaintiff to extend the time to and 
including the 2nd day of July, 1947, within which to 
file the record on appeal and docket the action, and 
it appearing to the court that there is good cause and 
that it is proper to grant the extension of time, and 
the court being fully advised, 

It Is Therefore Ordered that the Plaintiff be, and 
it is hereby granted an extension of time to and in- 
cluding the 2nd day of July 1947, within which to 
file an appeal and docket the action. 

Dated at Portland, Oregon, this 4th day of June, 
1947. 

/s/ CLAUDE McCOLLOCH, 
Judge. 



a -* r\ in 



32 United States of Aw erica vs. 

[Title of District Court and Cause.] 

STATEMENT OF POINTS TO BE RELIED 
UPON ON APPEAL 

The United States of America, plaintiff in the 
above-entitled case, makes the following statement 
of points to be relied upon on appeal: 

1. The District Court erred in dismissing the 
amended complaint of the United States of America 
insofar as the first cause of action is concerned. 

2. The District Court erred in holding that the 
United States was not the real party in interest. 

3. The District Court erred in holding that the 
United States was not a 'proper party to maintain 
the action. 

4. The District Court erred in holding that the 
Reconstruction Finance Corporation was the real 
party in interest. 

5. The District Court erred in holding that only 
the Reconstruction Finance Corporation could 
maintain the action. 

Respectfully submitted, 
/s/ A. DEYITT VANECH, 

Assistant Attorney General, 
Washington, D. C. 
/s/ HENRY L. HESS, 

United States Attorney, 
Portland, Oregon. 
/s/ ROGER P. MARQUIS, 
/s/ WILMA C, MARTIN, 

Attys., Department of Justice, 
Washington, D. C. [27] 

[Affidavit of service by mail attached.] 
[Endorsed] : Filed June 19, 1947. [28] 



Shofner Iron and Stet I Works 33 

[Title of District Court and Cause.] 

DESIGNATION OF RECORD 

To: The Clerk of the District Court of the United 
States for the District of Oregon : 

The United States of America, plaintiff, desig- 
nates the following* as the record to be forwarded to 
the United States Circuit Court of Appeals for the 
Ninth Circuit, in the appeal of the above-entitled 
case: 

1. Complaint and summons 

2. Motion of Defendant to allow service of 
Reconstruction Finance Corporation 

3. Affidavit of Chester A. Sheppard, to sup- 
port Motion to allow service of Reconstruction 
Finance Corporation, dated September 12, 1946 

4. Order, dated November 15, 1946, denying 
Defendant's Motion to serve Reconstruction 
Finance Corporation 

5. Amended Complaint 

6. Motion, dated December 5, 1946, to 
dismiss 

7. Decision and Order, dated February 6, 
1947 

8. Order, dated February 13, 1947 

9. Motion of Plaintiff, dated February 19, 
1947, to amend Order 



34 United States of America vs. 

10. Decision on Motion, dated March 6, 1947, 
to amend Order 

11. Order, dated March 11, 1947, denying 
Motion for allowance of time to amend com- 
plaint 

12. Motion of Plaintiff, dated March 14, 
1947 

13. Order, dated March 17, 1947, dismissing 
second cause of action in Plaintiff's amended 
complaint [29] 

14. Notice of Appeal by Plaintiff 

15. Order, dated June 4, 1947, extending 
time to docket appeal 

16. Designation of Record (District Court) 

17. Statement of Points (District Court) 

Respectfully submitted, 
/s/ A. DEVITT VANECH, 

Assistant Attorney General, 
Washington, D. C. 

/s/ HENRY L. HESS, 

United States Attorney, 
Portland, Oregon. 

/s/ ROGER P. MARQUIS, 
/s/ WILMA C. MARTIN, 

Attys., Department of Justice, 
Washington, D. C. 

[Affidavit of service by mail attached.] 

[Endorsed] : Filed June 19, 1947. [30] 



Shofncr Iron and Steel Works 35 

[Title of District < !ourt and ( lause.] 

DOCKET ENTRIES 

1946 

Aug. 12 Filed complaint. 

Aug. 13 Issued summons — to Marshal. 

Aug. 19 Filed summons with Marshal's return. 

Aug. 23 Filed stipulation for extension of time to 
Sept. 16, for defendant to plead. 

Aug. 28 Filed and entered order allowing defend- 
ant to Sept. 16, 1946 to plead or answer. 

Sept. 13 Filed defendant's motion to serve Recon- 
struction Finance Corporation with Third 
Party Complaint and summons. 

Sept. 23 Record of hearing on above motion. 

Nov. 15 Filed and entered order denying motion 
to serve Reconstruction Finance Corpora- 
tion and allowing 10 davs for defendant 
to appear. 

'Nov. 25 Filed stipulation and entered order allow- 
ing defendant to and including Dec. 5, 
1946 to appear. 

Nov. 26 Filed amended complaint. 

Dec. 5 Filed motion of defendant for order of 
dismissal, or to strike complaint. 

1947 
Jan. 4 Filtered order setting hearing on motion 

indant for order of dismissal or to 
strike complaint for Jan. 15, 1947 — 10 a.m. 
Jan. 15 Record of hearing on motion of defend- 
ant to dismiss or to strike complaint i 
amended complaint from the files, plain- 



36 United States of America vs. 

1947 

tiff 5 days for brief; defendant 5 days 
thereafter to file reply brief. 

Jan. 20 Filed plaintiff's brief. 

Feb. 6 Filed opinion granting motion to dismiss 
amended complaint as to first cause of ac- 
tion and denying motion to dismiss as to 
second cause of action. 

Feb. 6 Entered order setting for trial on March 
18, 1947. 

Feb. 7 Entered order reserving all motions and 
preliminary matters to time of pre-trial 
and trial. 

Feb. 15 Filed and entered order dated Feb. 13, 
1947, dismissing first cause of action in 
amended complaint, and striking first 
cause of action from files, denying motion 
to strike original complaint and denying 
motion to dismiss or strike second cause 
of action. 

Feb. 19 Filed motion to amend order of Feb. 15, 
1947. 

Feb. 20 Entered order re-setting for trial on 
March 21, 1947. 

Feb. 28 Entered order setting hearing on motion 
to amend order of Feb. 15, 1947, for 
March 3, 1947, 10 a.m. 

Mar. 3 Record of hearing on motion of plaintiff to 
amend order of Feb. 15. 

Mar. 6 Filed decision on motion to amend order 
of Feb. 15. 



Shofner Fro)i and Steel Works 37 

1947 

Mar. 11 Filed and entered order denying motion 
of plaintiff for allowance of time to file 
amended complaint naming Reconstruc- 
tion Finance Corporation as a party plain- 
tiff. 

Mar. 17 Filed motion for order of dismissal with- 
out prejudice as to 2nd cause of action. 

Mar. 17 Filed and entered order of dismissal with- 
out prejudice as to 2nd cause of action. 

May 2 Filed appeal by United States. 

June 3 Filed motion for an order extending time. 

June 4 Filed and entered order granting plain- 
tiff to July 2, 1947, to file appeal. 

June 19 Filed designation of record. 

June 19 Filed statement of points to be relied upon 
on appeal. [32] 



In the District Court of the United States 
for the District of Oregon 
United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the United States 
District Court for the District of Oregon, do hereby 
certify that the foregoing pages numbered from 1 
to 33 inclusive constitute the transcript of record on 
appeal from a judgment of said court in a cause 
therein numbered Civil 3224, in which the United 
States of America is plaintiff and appellant, and the 
Shofner Iron and Steel Works is defendant and 
appellee; that the said transcript has been prepared 
by me in accordance with the designation of con- 
tents of record on appeal filed by the appellant, and 



38 United States of America vs. 

in accordance with the rules of court ; that I have 
compared the foregoing- transcript with the original 
record thereof, and that it is a full, true and cor- 
rect transcript of the record and proceedings had 
in said court in said cause, in accordance with the 
said designation as the same appears of record and 
on file at my office and in my custody. 

In Testimony Whereof I have hereunto set my 
hand and affixed the seal of said court in Portland, 
in said District, this 27th day of June, 1947. 

[Seal] LOWELL MUNDORFF, 

Clerk. 

By /s/ F. L. BUCK, 

Chief Deputy. [33] 

[Endorsed]: No. 11671. United States Circuit 
Court of Appeals for the Ninth Circuit. United 
States of America, Appellant, vs. Shofner Iron and 
Steel Works, a Corporation, Appellee. Transcript 
of Record. Upon Appeal from the District Court of 
the United States for the District of Oregon. 

Filed June 30, 1947. 

/s/ PAUL P. O'BRIEN, 
Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



Shofm r Iron and Steel Works 39 

In the District Court of the United States for the 

District of Oregon 

No. 3224— Civil 

UNITED STATES OP AMERICA, 

Plaintiff, 
vs. 

SHOFNER IRON AND STEEL WORKS, 

Defendant. 

DECISION 

Defendant moves to dismiss the action or to strike 
from the files the complaint and amended complaint 
upon the grounds (a) that neither the complaint or 
the amended complaint states a claim upon which 
relief can be granted, and (b) that the plaintiff is 
not the real party in interest. 

As the amended complaint supersedes the original 
complaint no motion of any kind can now be ad- 
dressed to the original complaint as it performs no 
function in the action and the motion is denied in 
its entirety as to the original complaint. 

Defendant contends that the Reconstruction 
Finance Corporation is the real party in interest 
and relies upon subdivision (a) of Rule 17 of the 
Rules of Civil Procedure, which provides where 
material here " Every action shall be prosecuted in 
the name of the real party in interest," and Subdi- 
vision (b) where material provides "The capacity 
of a corporation to be sued shall be determined by 
the law T under which it w T as organized.' 



10 United States of America vs. 

The Reconstruction Finance Corporation was 
organized by an Act of Congress as a corporation, 
Section 601, et seq., Title 15, U. S. C. A. By Sec- 
tion 604 of the same Title it is specifically given the 
authority to sue and be sued. Plaintiff alleges in 
the amended complaint that the Reconstruction 
Finance Corporation is the owner of the real prop- 
erty; that the defendant now holding possession was 
originally let into possession of the property by it 
as its tenant although the period of tenancy has 
expired; it alleges that it has declared the real 
property surplus and transferred " jurisdiction" to 
the War Assets Administration for disposal, and 
that Administration has the right of present pos- 
session, of necessity, so that it may dispose of the 
property. It does not follow of necessity that the 
War Assets Administration must possess the prop- 
erty physically in order to dispose of it any more 
so than a real estate broker must physically possess 
the home of its client in order to dispose of the 
home. However that may be, it is apparent that 
the War Assets Administration does not have pos- 
session of the property and cannot get it except as 
a result of litigation that it itself cannot undertake 
in its own name, and the question presented is, who 
is the party properly to carry forward the litigation, 
in other words the real party in interest? 

The Reconstruction Finance Corporation and the 
United States arc 4 not the same or the same entities. 

The Reconstruction Finance Corporation is a 
corporate agency of the government which is its 
sole stockholder, 15 IT. S. C. A. 601. It is managed 



Shofner Iron and Steel Works 41 

by a Board of Directors appointed by the President, 
by and with the advice and consent of the Senate. 
It has wide powers and conducts financial operations 
on a vast scale. While it acts as a governmental 
agency in performing its functions, its transactions 
are akin to those of private enterprises, but it is 
not the sovereign and does not possess the immuni- 
ties that the sovereign does possess, Reconstruction 
Finance Corporation v. Menihan Corp., et al., 312 
U. S. 81. It is an entity in law, separate and apart 
from the United States. 

Congress must have contemplated, in giving to 
the corporation the vast powers that it gave to it 
in transacting its multifarious business, that in so 
doing it would probably acquire causes of action 
against others and for that reason it gave the corpo- 
ration the power to sue. Equally, it was within the 
contemplation of Congress, that in transacting the 
multifarious business it had a right to transact, it 
might give to others a cause of action against it, 
and gave to those others the right to sue the corpo- 
ration, each right being a valuable right to the one 
possessing it under the act of Congress. It thus 
could not be contended by the defendant, if the ac- 
tion were brought in the name of the Reconstruction 
Finance Corporation, that the United States w 
the proper party in interest and the action should 
be maintained in its name. Equally, if one possess- 
ing a cause of action against the Reconstruction 
Finance Corporation should sue that corporation the 
corporation could not well move to dismiss the 
action on the ground that the United States and not 



42 United States of America vs. 

the corporation was the real party in interest as 
defendant. I do not believe the Congress, in giving 
to the corporation the power to sue, in effect gave 
to it an election to maintain the action in its own 
name, or in the name of the United States, as it 
might appear in each particular action to be to the 
particular advantage for some reason of the corpo- 
ration to sue in the name of the United States 
rather than in its own name. Ordinarily causes of 
action possessed by the Reconstruction Finance 
Corporation are its causes of action and not causes 
of action of the United States or of the United 
States and the corporation jointly, and as to those 
causes of action and except where special circum- 
stances appear from the pleading, which do not 
appear here, the cor] .'oration is the real parly in 
interest and not the United States. To hold other- 
wise might deny a defendant a valuable right which 
it might have as a party litigant against the Recon- 
struction Finance Corporation if the action w< 
brought in its name which it could not or would not 
have if the action were brought in the name of the 
United States alone. The case of Reconstruction 
Finance Corporation v. Menihan Corp., supra, is 
an illustration, for there the defendant was suc- 
cessful and being successful was entitled to a money 
judgment for its costs that it would not have been 
entitled to had the action been permitted to be 
maintained in the United States. 

It necessarily follows that the motion made in so 
Ear as the first cause of action is concerned is meri- 
torious and ought to be sustained on both of its 
-rounds. The United States, not being the real 



ShofiK r Iron and Stei I \\'<>>'l<s 43 

party in interest, of course cannol stale a claim upon 
which relief can be granted. 

As to the second cause of action, it is alleged tl 
the defendant leased the real property to the 1 plain- 
tiff from the 28th day of September, 1943, to and 
including the 23rd day of March, 1963; that the 
plaintiff is entitled to the possession of the property 
and that defendant unlawfully withholds possession 
of the property from the plaintiff. The question 
presented being that the plaintiff is not the real 
party in interest, as the transaction was had, as ap- 
pears from the second cause of action, between the 
plaintiff and the defendant and not between the 
defendant and the Reconstruction Finance Corpo- 
ration, there is nothing in the allegations of the 
second cause of action that leads to the conclusion 
that anyone else except the plaintiff is or could be 
the real party in interest and the motion to dismiss 
as to the second cause of action ought to be denied. 

It Is Therefore Ordered that the motion to dis- 
miss the amended complaint is granted in so far as 
the first cause of action is concerned and denied as 
to the second cause of action. 

Done and dated this 6th day of February, 1947. 

R. LEWIS BROWN, 

United States District Judge. 



&' 



[Endorsed] : Filed February 6, 1947. 



44 TJniti d States of A me rica vs. 

United States of America, 
District of Oregon — ss. 

I, Lowell Mundorff, Clerk of the United States 
District Court for the District of Oregon, do hereby 
certify that the foregoing copy of Decision in Cause 
No. Civil 3224, United States of America vs. Shofner 
Iron and Steel Works has been by me compared 
with the original thereof, and that it is a correct 
transcript therefrom, and of the whole of such 
original, as the same appears of record and on file 
at my office and in my custody. 

In testimony whereof I have hereunto set my 
hand and affixed the seal of said court at Portland, 
in said District, this 11th day of August, 1947. 

[Seal] LOWELL MUXDORFF, 

Clerk, 
By /s/ F. L. BUCK, 

( fihief Deputy Clerk. 



[Endorsed]: No. 11671. United States Circuit 
Court of Appeals for the Ninth Circuit. United 
State ~ America, Appellant, vs. Shofner Iron and 
Steel Works, a Corporation, Appellee. Supple- 
mental Transcript of Record. Upon Appeal from 
the Disl I ourt of the United States for the Dis- 

trict of Oregon. 

Filed August 13, 1947. 

/s/ PAUL P. O'BRIEN, 
( 'lrrk of the United Stat< - ( lircuit Court of Appeals 
tor the Ninth Circuit. 



Shofner I run and Sti 1 1 Works 45 

In the United States Circuit Court of Appeals 

for the Ninth Circuit 

No. 11671 

UNITED STATES OF AMERICA, 

Appellant, 
vs. 

SHOFNER IRON AND STEEL WORKS, 

Appellee. 

STATEMENT OF POINTS AND DESIGNA- 
TION OF PORTIONS OF RECORD TO BE 
PRINTED 

The United States of America, appellant in the 
above-entitled case, adopts the statement of points 
filed in the district court as the statement of points 
to be relied upon in this Court and desires that the 
whole of the record as filed and certified be printed 
in its entirety. 

Respectfully submitted, 

/s/ A. DEVITT VANECH, 

Assistant Attorney General, 

i 

Washington, D. C. 

/s/ ROGER P. MARQUIS, 
/s/ WILMA C. MARTIN, 

Attys., Department of Justice, 
Washington, 1). C. 

[Endorsed]: Filed July 11. 1947. 



^>*HNAL 



No. 11671 



In the United States Circuit Court of Appeals 
for the Ninth Circuit 



United States of America, appellant 

v. 

Shofner Iron and Steel Works, a Corporation, 

appellee 



APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES 
FOR THE DISTRICT OF OREGON 



BRIEF FOR THE UNITED STATES 



A. devitt vanech, 

Assistant Attorney Gteneral. 

HENRY L. HESS, 
United stales Attorney, Portland, Oregon. 

ROGER P. MARQUIS, 
WILMA C. MARTIN, 

Attorneys, Department of Justice, Washington, D. C. 



FILE 



INDEX 

Page. 

Opinion below 1 

Jurisdiction 1 

Question presented 2 

Statute and Executive order involved 2 

Statement 2 

Specification of errors 5 

Argument: 

The United States may maintain a suit to recover possession of 
property declared surplus by RFC against a defendant wrong- 
fully in possession 6 

A. The United States may maintain the suit by virtue of 

the provisions of the Surplus Property Act 6 

B. The United States may maintain the suit to assert 

rights arising out of the transactions of one of its 

wholly owned corporations 11 

Conclusion 14 

Appendix 16 

CITATIONS 
Cases: 

Baltimore Nat. Bank v. Tax Comm'n., 297 U. S. 209 13 

Cherry Cotton Mills v. United Staies, 327 U. S. 536 11, 12, 14 

Clallam County v. United States, 263 U. S. 341 13 

Defense Supplies Corp. v. United States Lines Co., 148 F. 2d 311 __ 11 

Emergency Fleet Corp. v. Western Union, 275 U. S. 415 13 

Ericksonv. United States, 264 U. S. 246 12 

Inland Waterways Corp. v. Young, 309 U. S. 517 13 

King County, Wash. v. United States Ship. Board E. F. Corp., 282 

Fed. 950 13 

Owensboro National Bank v. Owensboro, 173 U. S. 664 13 

Reconstruction Finance Corp. v. Menihan, 312 U. S. 81 14 

RFC v. Graijdon, 16 F. Supp. 765 13 

RFC v. Krauss, 12 F. Supp. 44 13 

Russell Wheel & Foundry Co. v. United States, 31 F. 2d 826 12 

United States v. Arthur, 23 F. Supp. 537 13 

United States v. Ascher, 49 F. Supp. 257 13 

United States v. Czarnikow-Rionda Co., 40 F. 2d 214 13 

United Stales v . Freeman, 21 F. Supp. 593 13 

United States v. Skinner & Eddy Corp., 35 F. 2d 889, certiorari 

denied 281 U. S. 770 12 

United States v. Stein, 48 F. 2d 626 13 

United States v. Walter, 263 U. S. 15 13 

United Slates Grain Corp. v. Phillips, 261 U. S. 106 13 

759433—47 1 U) 



II 

Statutes: 

Surplus Property Act of October 3, 1944, 58 Stat. 769, c. 479: Page 

Sec. 3, 50 U. S. C. App. Supp. V, sec. 1612 8 

Sec. 3 (g), 50 U. S. C. App. Supp.V, sec. 1612 (g) 9 

Sees. 5-6, 50 U. S. C. App. Supp. V, sees. 1614-1615 8 

Sec. 10, 50 U. S. C. App. Supp. V, sec. 1619 8 

Sec. 11, 50 U. S. C. App. Supp. V, sec. 1620 9 

Sec. 1620 (d) 9 

Sec. 15, 50 U. S. C. App. Supp. V, sec. 1624 10 

Surplus Property Act of October 3, 1944, 58 Stat. 765, c. 479 as 

amended 3 

Act of September 18, 1945, c. 368, sees. 1-2, 50 U. S. C. App. 

Supp. V, sees. 1614a-1614b 8 

Reconstruction Finance Corporation Act: 

Sec. 2. as amended, 15 U. S. C. sec. 602 6 

Sec. 5 (d), as amended by the Act of June 25, 1940, 54 Stat. 

572, c. 427, sec. 5, as amended, 15 U. S. C. sec. 606b (3) 6 

Sec. 10, as amended, 15 U. S. C. Supp. V, sec. 610 13 

Joint Resolution of June 30, 1945, c. 215, 59 Stat. 310, 15 U. S. 

C. A. sec. 606b, note 6 

Miscellaneous: 

Executive Order No. 9689. 11 Fed. Reg. 1265 (1946) 9 

Surplus Property Administration Reg. No. 1, sec. 8301.2 (b) (2), 

10 Fed. Reg. 14064 9 

War Assets Administration Reg. No. 1, sec. 8301.2 (g) (2), 11 

Fed. Reg. 7971 (1946) 9 

6 Fed. Reg. 2971 (1941) 6, 13 

11 Fed. Reg. 408 (1946) 9 



In the United States Circuit Court of Appeals 
for the Ninth Circuit 



No. 11671 



United States of America, appellant 

v. 
Shofner Iron and Steel Works, a Corporation, 



appellee 



APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES 
FOR THE DISTRICT OF OREGON 



BRIEF FOR THE UNITED STATES 



OPINION BELOW 

The opinion of the district court (R. ) is re- 
ported at 71 F. Supp. 161. 

jurisdiction 

This is a suit brought by the United States to re- 
cover possession of property wrongfully held by the 
defendent (R. 16-19). The jurisdiction of the dis- 
trict court rested upon Section 24 (1) of the Judi- 
cial Code, 28 U. S. C. sec. 41 (1). By a decision and 
order entered February 6, 1947, the trial court 
granted a motion to dismiss the complaint as to the 
first cause of action (R. — — ) and on February 15, 

(i) 



1947, an order was entered dismissing that cause of 
action (R. 24). Notice of appeal was filed May 2, 
1947 (R. 30-31). The jurisdiction of this Court is 
invoked under Section 128 of the Judicial Code as 
amended, 28 U. S. C. sec. 225 (a). 



QUESTION PRESENTED 



Whether the United States may maintain a suit 
to recover possession of property owned by and for- 
merly under the jurisdiction of the Reconstruction Fi- 
nance Corporation which has been declared surplus to 
the needs of the Reconstruction Finance Corporation 
and transferred to the jurisdiction of the War Assets 
Administration under the Surplus Property Act.. 

STATUTES AND EXECUTIVE ORDER INVOLVED 

The pertinent provisions of the Surplus Property 
Act of October 3, 1944, 58 Stat. 765, c. 479 as amended, 
50 U. S. C. App. Supp. V, sees. 1611-1646 ; the Act of 
September 18, 1945, 59 Stat. 533, c. 368, sees. 1-2, 50 
U. S. C. App. Supp. V, sees. 1614a-1614b; and of 
Executive Order No. 9689, 11 Fed. Reg. 1265 (1946), 
are set out in the Appendix, infra, pp. 16-22. 

STATEMENT 

This is a suit brought by the United States to re- 
cover possession of certain property, and the facts of 
the case, as they appear in the pleadings, may be 
summarized as follows: 

In September 1942, the Defense Plant Corporation 
entered into a lease agreement with the Shofner Iron 
and Steel Works, whereby it leased certain described 
property to Shofner (R, 16-17). At the time of the 



agreement the property was owned by Shofner, but in 
accordance with the terms of the lease Defense Plant 
acquired title from Shofner on January :)(), 1943 
(R. 16, 18). On July 1, 1945, the Reconduction 
Finance Corporation succeeded to all right, title and 
interest of Defense Plant in the land and all rights 
of Defense Plant under the lease (R. 18). RFC 
terminated the lease in accordance with its terms 
effective as of December 5, 1945 (R. 18). Thereafter 
RFC consented to Shofner 's remaining in possession 
until May 15, 1946 (R. 18). Since that time Shofner 
has remained in possession without authority, right, 
title or interest (R. 18). On May 24, 1946, RFC 
declared the premises and facilities surplus and trans- 
ferred jurisdiction of the property to the War Assets 
Administration pursuant to the Surplus Property Act 
of October 3, 1944, 58 Stat. 765, as amended and 
regulations thereunder (R. 18-19). On August 12, 
1946, a suit was instituted in the name of the United 
States by the filing of a complaint which set forth the 
above facts (R. 2-5) and, alleging the right of the 
United States to possession and Shofner 's unlawful 
and wrongful withholding of possession, prayed for 
judgment against Shofner for possession of the prop- 
erty (R. 5). 

On September 13, 1943, Shofner moved for leave to 
make RFC a third-party defendant so that it might 
assert a counter-claim against RFC (R. 9). By affi- 
davit in support of the motion Shofner stated that 
Defense Plant had constructed a foundry for the 
production of steel castings on the premises described 
in the complaint and leased to Shofner; that in the 



latter part of December, 1944, Defense Plant agreed 
to make certain changes in its foundry plant for the 
purpose of increasing production, but such changes 
were not made; that Shofner 's claim against RFC 
arose out of the failure of Defense Plant to make the 
changes which allegedly resulted in damage to Shof- 
ner and that this and other rights and claims against 
RFC could not be determined in the suit without the 
presence of RFC (R. 10-14). The motion was denied 
on November 15, 1946, by Judge McColloch (R, 15). 

On November 26, 1946, the United States filed an 
amended complaint setting forth two causes of action, 
the first being the same cause alleged in the original 
complaint (R. 16-21). For a second cause of action, 
the United States alleged that Shofner had leased 
certain other described property to the United States 
for twenty years, that the United States had the 
right to possession under the lease and Shofner un- 
lawfully and wrongfully withheld possession (R. 19- 
21). The relief prayed for was possession of the 
described properties (R. 21). 

Shofner moved on December 5, 1946, for a dismissal 
of the cause on the ground that neither the complaint 
nor the amended complaint stated a claim on w^hieh 
relief could be granted and that the United States was 
not the real party in interest (R. 23). On February 
6, 1947, District Judge R. Lewis Brown granted the 
motion to dismiss the amended complaint insofar as it 
related to the first cause of action on the ground that 
RFC and not the United States was the real party in 
interest (R. — The motion to dismiss was de- 



nied as to the second cause of action because it did 
not appear from the allegations in the amended com- 
plaint that anyone other than the United States was 

or could be the real party in interest (R. ).' An 

order dismissing the first cause of action was entered 
February 15, 1947 (R, 24). On February 19, 1947, 
the Government moved to amend the order so as to 
allow it time within which to file an amended com- 
plaint naming RFC as a party plaintiff, but the mo- 
tion was denied on March 6, 1947, by Judge Foley 
(R. 25-27). Thereafter, this appeal was taken (R. 
30). 2 

SPECIFICATION OF ERRORS 

The district court erred — 

1. In dismissing the amended complaint of the 
United States as to the first cause of action. 

2. In holding that the United States w r as not the 
real party in interest. 

3. In holding that the United States was not a 
proper party to maintain the action. 

4. In holding that RFC was the real party in 
interest. 

5. In holding that only RFC could maintain the 
action. 



1 Inasmuch as the status of the United Stales in the second cause 
of action was in fact no different from its status in the first cause, 
the second cause of action was subsequently dismissed without 
prejudice upon motion by the Government (R. 28-30). 

1 The notice of appeal referred to the order of February 6, 1947, 
granting the motion to dismiss. That order was implemented by 
the formal order of dismissal on February 15, 1947 (11. 24). 



6 

ARGUMENT 

The United States may maintain a suit to recover possession 
of property declared surplus by RFC against a defendant 
wrongfully in possession 

A. The United States may maintain the suit by 
virtue of the provisions of the Surplus Property 
Act. — The property here involved was acquired by 
Defense Plant Corporation and leased to Shofner to 
provide facilities for the production of steel castings 
needed in the prosecution of the war (cf. R. 10-13). 
Defense Plant was a corporation created by RFC 
under authority of Section 5 (d) of the Reconstruction 
Finance Corporation Act, as amended by Act of June 
25, 1940, 54 Stat. 572, c. 427, sec. 5, as amended, 15 
U. S. C, sec. 606b (3), for the purpose (among 
other things) of acquiring real estate to build or 
expand plants for the manufacture of arms, ammu- 
nition and implements of war in aid of the national 
defense program. 6 Fed. Reg. 2971 (1941). Stock 
in the Defense Plant Corporation was wholly owned 
by RFC, the stock of which, in turn, is wholly owned 
by the United States. 6 Fed. Reg. 2971 (1941) ; RFC 
Act, sec. 2, as amended, 15 U. S. C. sec. 602. On July 
1, 1945, Defense Plant Corporation was dissolved and 
all its functions, powers, duties, assets, liabilities, etc., 
were transferred to RFC. Joint Resolution of June 
30, 1945, c. 215, 59 Stat. 310, 15 U. S. C. Supp. V, sec. 
606b, note. Thus RFC succeeded to all right, title, 
interest and obligations of Defense Plant with refer- 
ence to the property here involved. 



As alleged in the Government's amended complaint, 
RFC terminated Shofner's lease to the property in 
accordance with its terms effective December 5, 1945 
(R, 18). As further alleged, Shofner's right to pos- 
session was extended by agreement to May 15, 1946 
(R. 18) and since that time Shofner has unlawfully 
and wrongfully withheld possession (R. 19). On May 
24, 1946, RFC declared the premises and facilities 
surplus and transferred jurisdiction to the War Assets 
Administration pursuant to the Surplus Property Act 
and regulations thereunder (R. 18-19). Since the 
War Assets Administration is an administrative 
agency of the Government and not a Government 
corporation having the right to sue and be sued, this 
suit to recover possession of the property was insti- 
tuted in the name of the United States. The court 
below T dismissed the suit on the theory that RFC, a 
Government corporation having' the right to sue and 
be sued in its own name, was the real party in interest 
(R." — - — ). We submit that this ruling was plainly 
erroneous because it ignored the provisions of the 
Surplus Property Act. 

A great deal of property was acquired during the 
war by various Government agencies, including Gov- 
ernment corporations, for use in prosecution of the 
war. Since various properties from time to time were 
no longer needed for the purposes for which they were 
acquired and in anticipation of the termination of the 
war, the Surplus Property Act of October 3, 1944, 58 
Stat. 765, c. 479, was passed to create a central Gov- 
ernment agency to facilitate and regulate the orderly 

759433—47 2 



8 

disposal of surplus property in accordance with cer- 
tain objectives laid down by Congress. The Act ap- 
plied to property of Government corporations such as 
RFC and Defense Plant. Surplus Property Act, sec. 
3, 50 U. S. C. App. Supp. V, sec. 1612. The original 
Act created a Surplus Property Board to have general 
supervision and direction over the care and dispo- 
sition of surplus property. Surplus Property Act, 
sees. 5-6, 50 U. S. C. App. Supp. V, sees. 1614-1615. 
Among its duties was the designation of other Govern- 
ment agencies as agencies to dispose of property, i. e. 
"disposal agencies/' Id. Section 10, 50 U. S. C. App. 
Supp. V, sec. 1619. Thus, property declared surplus 
by the Navy Department, depending on its type, might 
be disposed of either by the Treasury Department, 
the State Department or the Department of the In- 
terior. By the Act of September 18, 1945, c. 368, sees. 
1-2, 50 U. S. C. App. Supp. V, sees. 1614a-1614b, the 
Surplus Property Administration, headed by the Sur- 
plus Property Administrator, was created, the Sur- 
plus Property Board was abolished and its functions 
transferred to the Surplus Property Administrator. 
The activities of the newly created agency were, like 
those of the Board, confined to policy making func- 
tions and disposal functions were carried out by the 
disposal agencies designated by the Board or its suc- 
cessor, the Surplus Property Administrator. How- 
ever, effective March 25, 1946, both the policy making 
functions and the disposal functions, with exceptions 
not here important, were consolidated in one agency, 
the War Assets Administration, headed by the War 



9 

Assets Administrator. Executive Order No. 9689, 11 
Fed. Reg. 1265 (1946). Consequently, the War Assets 
Administration is now vested with the powers and 
responsibilities of disposing of surplus property of 
the type involved here. 3 

The Surplus Property Act, as now administered, 
requires Government agencies owning property which 
is surplus to their needs and responsibilities to report 
such property to the War Assets Administration. 
Section 11, 50 U. S. C. App. Supp. V, sec. 1620. When- 
ever any surplus property is reported, the disposal 
agency (in this case, the War Assets Administration) 
is given the responsibility and authority to dispose of 
it and to care for and handle it pending its disposition. 
Surplus Property Act, section 11 (d), 50 U. S. C. App. 
Supp. V, sec. 1620 (d). 4 Under the statute the War 
Assets Administration is authorized to " dispose of 
such property by sale, exchange, lease or transfer" 
and may execute or require any owning agency to 
execute such documents as it deems necessary to trans- 
fer title or take such other action as it deems neces- 
sary or proper to transfer or dispose of property or 



3 For the succession of agencies designated to dispose of indus- 
trial real property, under which classification the property in this 
case falls, see Surplus Property Administration Reg. No. 1, sec. 
8301.2 (b) (2), 10 Fed. Reg. 14064; 11 Fed. Eeg. 408 (1946); 
Executive Order No. 9689, 11 Fed. Reg. 1265 (1946) ; see also War 
Assets Administration Reg. No. 1, sec. 8301.2 (g) (2) , 11 Fed. Reg. 
7971 (1946). 

4 "Care and handling'' is defined by section 3 (g), 50 U. S. C. 
App. Supp. V, sec. 1612 (g) , as including "completing, repairing, 
converting, rehabilitating, operating, maintaining, preserving, 
protecting, insuring, storing, packing, handling and transporting" 
surplus property. 



10 

otherwise carry out the provisions of the Act. Sur- 
plus Property Act, section 15, 50 U. S. C. App. Supp. 
V, 1624. 

Since RFC has declared the property here involved 
surplus to its needs and responsibilities, it must be 
disposed of by War Assets Administration. While 
RFC still has the technical legal title, the responsibil- 
ity and authority for disposing of the property and 
the care and handling of the property pending dis- 
posal are by the terms of the Act vested in the War 
Assets Administration. The court below stated 

(R. ) : "It does not follow of necessity that 

the War Assets Administration must possess the prop- 
erty physically in order to dispose of it any more so 
than a real estate broker must physically possess the 
home of its client in order to dispose of the home". 
But, the ability to deliver possession to a purchaser is 
indispensable to carrying out the responsibility and 
authority vested in War Assets for disposing of sur- 
plus property. And, even more important, the War 
Assets Administration must not only dispose of the 
property, but must administer it from the time it is 
declared surplus to the time it is sold. Obtaining pos- 
session of surplus property wrongfully withheld is 
obviously a necessary adjunct to the responsibility for 
the care and handling of surplus property pending its 
disposal. It is clear that Congress intended that the 
War Assets Administration should have possession of 
all surplus government property, since the Congres- 
sional definition of "care and handling" is all embrac- 
ing and includes many functions which could not be 



11 

pel- formed without taking possession such as "com- 
pleting", "converting", "rehabilitating" and "operat- 
ing" the property. Of direct application to the pres- 
ent case is the inclusion in the definition of the func- 
tions of "maintaining, preserving, protecting" the 
property. Being thus charged with the duty of ex- 
cluding vandals, trespassers and other unauthorized 
persons from the premises, the War Assets Adminis- 
tration was obviously entitled to recover possession 
from the defendants. Since War Assets is an admin- 
istrative agency its litigation is conducted by and in 
the name of the United States. Accordingly, it is 
submitted that this suit w T as properly instituted in 
the name of the United States. 

B. The United States may maintain the suit to 
assert rights arising out of the transactions of one of 
its wholly oivned corporations. — The decision of the 
court below is based upon the fact that RFC may "sue 
and be sued" in its own name. The court concluded 
that RFC is a separate and distinct entity akin to a 
private corporation, and therefore, that a cause of 
action of RFC is not a cause of action of the United 
States (R. ). 

But the fact that RFC might have maintained the 
action does not prove that the United States cannot 
also bring the suit. Neither the suability of the Gov- 
ernment corporation nor its power to sue deprives 
that entity of its status as an agency of the United 
States {Cherry Cotton Mills v. United States, 327 U. 
S. 536, 539 (1946) ; cf. Defense Supplies Corp. v. 
United States Lines Co., 148 F. 2d 311 (C. C. A. 2, 



12 

1945), certiorari denied 326 U. S. 746) or abridges in 
any degree the substantial rights of the United States. 
The mere fact that the form of a wholly owned corpo- 
ration is employed does not mean, as the trial court 
seemed to think (R. - — ), that the agency is to 
be treated as any private corporation and the gov- 
ernmental interests are to be ignored. As the Su- 
preme Court said in the Cherry Cotton Mills case, 
supra (a case in which the United States upon being 
sued for a tax refund was permitted to recover on a 
counterclaim for indebtedness due RFC) (p. 539) : 

Its [RFC's] directors are appointed by the 
President and confirmed by the Senate; its ac- 
tivities are all aimed at accomplishing a public 
purpose; all of its money comes from the Gov- 
ernment; its profits, if any, go to the Govern- 
ment; its losses the Government must bear. 
That the Congress chose to call it a corporation 
does not alter its characteristics so as to make it 
something other than what it actually is, an 
agency selected by Government to accomplish 
purely governmental purposes. 

For this reason, the courts have uniformly held that 
in addition to the corporation's right to sue, the 
United States mav sue in its own name on claims 
arising out of transactions with such corporations. 
Erickson v. United States, 264 U. S. 246 (1924) 
(Spruce Corporation) ; United States v. Skinner & 
Eddy Corp., 35 F. 2d 889, 892 (C. C. A. 9, 1929) 
(Fleet Corporation); Russell Wlieel & Foundry Co. 
v. United States, 31 F. 2d 826, 828 (C. C. A. 6, 1929) 
(same); United States v. Czarnikow-Rionda Co., 40 



13 

F. 2d 214, 215-216 (C. C. A. 2, 1930), certiorari 
denied 282 U. S. 844 (same) ; United States v. Ascher, 
49 F. Supp. 257 (S. D. Calif. 1943) (RFC); United 
States v. Arthur, 23 F. Supp. 537 (S. D. N. Y. 1937) 
(same) ; United States v. Freeman, 21 F. Supp. 593, 
598 (D. Mass. 1937) (same) ; RFC v. Graydon,, 16 F. 
Supp. 765 (E. D. S. C. 1936) (same) ; #1^7 v. Krauss, 
12 F. Supp. 44 (D. N. J. 1935) (same) ; United States 
v. Stein, 48 F. 2d 626 (N. D. Ohio, 1921) (U. S. Hous- 
ing Corporation) ; cf. United States v. Walter, 263 
U. S. 15, 18 (1923) (Fleet Corporation). The same 
principle has been applied in other situations. Thus 
the property of such corporation is immune from 
state taxation, unless Congress specifically waives 
the immunity. {Clallam County v. United States, 
263 U. S. 341 (1923) ; King County, Wash. v. United 
States Ship. Board E. F. Corp., 282 Fed. 950 (C. C. A. 
9, 1922) ; Baltimore Nat. Bank v. Tax Comm'n, 297 
U. S. 209 (1936) ; Owensboro National Bank v. Owenx- 
boro, 173 U. S. 664, 668-669 (1899) ; see RFC Act, 
sec. 10, as amended, 15 U. S. C. Supp. V, sec. 610; 
6 Fed. Reg. 2971 (1941)). Likewise, the corporation 
enjoys the privilege of receiving a pledge of assets 
from a national bank to secure deposits of its funds, 
the right to reduced telegraph rates and similar rights. 
Inland Watemvays Corp. v. Young, 309 U. S. 517 
(1940) ; Emergency Fleet Corp. v. Western Union, 
275 U. S. 415 (1928) ; United States Grain Corp. v. 
Phillips, 261 U. S. 106 (1923). 

The trial court relied heavily (R. ' ) on the 
fact that if suit were brought by RFC it would be 



14 

subject to liability for costs if it were unsuccessful. 
Reconstruction Finance Corp. v. Menilmn Corp., 312 
U. S. 81 (1941). But this argument has been specifi- 
cally rejected by the Supreme Court in Chi rry Cotton 
Mills v. United States, 327 U. S. 536 (1946) where the 
court held (pp. 539-540) that the Menihan and similar 
cases did not limit the power of the United States to 
assert a debt due RFC as a counterclaim. And, while 
this point was not specifically mentioned, the many 
cases cited above, pp. 12-13, holding that the United 
States could sue on a claim of a government corpora- 
tion necessarily reject the argument. 

It is submitted, therefore, that the United States 
was a proper party to institute this suit to recover 
possession of federally-owned property. This is not 
to say that the RFC or the RFC and the United 
States together could not bring a similar suit. In 
fact, after dismissal of the present action, another 
suit was filed by the United States and RFC. How- 
ever, the appellee here is asserting that the present 
case is res judicata and therefore the second suit is 
barred. While it is not believed that this claim of 
res judicata has merit, the present appeal is prose- 
cuted to avoid any necessity of deciding that question 
and especially to avoid the delay in obtaining posses- 
sion which would attend litigation of the question. 

CONCLUSION 

The trial court erred in holding that the United 
States may not sue in its own name to recover pos- 
session of surplus property of a Government-owned 



15 

corporation* The right to maintain such a suit can 
be sustained either under the provisions of the Sur- 
plus Property Act or under the well-established prin- 
ciple that the United States may sue to protect its 
interests in claims arising out of the transactions 
of its wholly owned corporations. It is accordingly 
submitted that the order dismissing the amended 
complaint as to the first cause of action be reversed 
with instructions to proceed to the merits of the 
case. 
Respectfully. 

A. Devitt Vanech, 
Assistant Attorney General. 
Henry L. Hess, 
United States Attorney, 

Portland, Oregon. 
Roger P. Marquis, 
Wilma C. Martin, 
Attorneys, Department of Justice, 

Washington, D. C. 
August 1947. 



APPENDIX 

The pertinent provisions of the Surplus Property 
Act of October 3, 1944, 58 Stat. 765, as amended, 50 
U. S. C. App. Supp. V, sees. 1611-1646, are as 
follows : 

Sec. 3 [50 U. S. C. App. Supp. V, sec. 16121. 
As used in this Act — (a) The term "Govern- 
ment agency" means any executive department, 
board, bureau, commission, or other agency in 
the executive branch of the Federal Govern- 
ment, or any corporation wholly owned (either 
directly or through one or more corporations) 
by the United States. 

(b) The term "owning agency," in the case 
of any property, means the executive depart- 
ment, the independent agency in the executive 
branch of the Federal Government, or the cor- 
poration (if a Government agency), having con- 
trol of such property otherwise than solely as a 
disposal agency. 

(c) The term "disposal agency" means any 
Government agency designated under section 10 
to dispose of one or more classes of surplus 
property. 

(d) The term "property" means any interest, 
owned by the United States or any Govern- 
ment agency, in real or personal property, 
of any kind, wherever located, but does not 
include * * * 

(e) The term "surplus property" means any 
property which has been determined to be sur- 
plus to the needs and responsibilities of the 
owning agency in accordance with section 

11. * * * 

* * * * ■* 

(g) The term "care and handling" includes 
completing, repairing, converting, rehabilitat- 
ing, operating, maintaining, preserving, protect- 

(16) 



17 

ing, insuring, storing, packing, handling, and 
transporting, and, in the case of property which 
is dangerous to public health or safety, destroy- 
ing, or rendering innocuous, such property. 
* * * * * 

Sec. 5. (a) [50 U. S. C. App. Supp. V, sec. 
1614 (a)]. There is hereby established in the 
Office of War Mobilization, and in its successor, 
a Surplus Property Board (hereinafter called 
the "Board") j which shall be composed of three 
members, each of whom shall be appointed by 
the President, by and with the advice and 
consent of the Senate, and shall receive com- 
pensation at the rate of $12,000 per annum. 
***** 

Sec. 6. (50 U. S. C. App. Supp. V, sec. 1615) ; 
The activities of the Board shall be coordinated 
with the programs of the armed forces of the 
United States in the interests of the war effort. 
Until peace is concluded the needs of the armed 
forces are hereby declared and shall remain 
paramount. The Board shall have general 
supervision and direction, as provided in this 
Act, over (1) the care and handling and dis- 
position of surplus property, and (2) the 
transfer of surplus property between Govern- 
ment agencies. 



* 



Sec. 10. (a) [50 U. S. C. App. Supp. V, sec. 
1619 (a)]. Except as provided in subsection 
(b) of this section, the Board shall designate 
one or more Government agencies to act as 
disposal agencies under this Act. In exercising 
its authority to designate disposal agencies, the 
Board shall assign surplus property for disposal 
by the fewest number of Government agencies 
practicable and, so far as it deems feasible, shall 
centralize in one disposal agency responsibility 
for the disposal of all property of the same type 
or class. 



18 

Sec. 11. (a) [50 U. S. C. App. Supp. V, sec. 
1620]. Each owning agency shall have the 
duty and responsibility continuously to survey 
the property in its control and to determine 
which of such property is surplus to its needs 
and responsibilities. 

(b) Each owning agency shall promptly re- 
port to the Board and the appropriate disposal 
agency all surplus property in its control which 
the owning agency does not dispose of under 
section 14. 

(c) Whenever in the course of the perform- 
ance of its duties under this Act, the Board has 
reason to believe that any owning agency has 
property in its control which is surplus to its 
needs and responsibilities and which it has not 
reported as such, the Board shall promptly 
report that fact to the Senate and House of 
Representatives. Each owning agency and each 
disposal agency shall submit to the Board (1) 
such information and reports with respect to 
surplus property in the control of the agency, 
in such form, and at such reasonable times, as 
the Board may direct; (2) such information 
and reports with respect to other property in 
the control of the agency, to such extent, and in 
such form, as the Board may direct and as the 
agency deems consistent with national security. 

(d) When any surplus property is reported 
to any disposal agency under subsection (b) of 
this section, the disposal agency shall have re- 
sponsibility and authority for the diposition of 
such property, and for the care and handling 
of such property pending its disposition, in 
accordance with regulations prescribed by the 
Board. Where the disposal agency is not pre- 
pared at the time of its designation under this 
Act to undertake the care and handling of such 
surplus property the Board may postpone the 
responsibility of the agency to assume its duty 
for care and handling for such period as the 



19 

Board deems necessary to permit the prepara- 
tion of the agency therefor. 

(e) The Board shall prescribe regulations 
necessary to provide, so far as practicable, for 
uniform and wide public notice concerning sur- 
plus property available for sale, and for uni- 
form and adequate time intervals between notice 
and sale so that all interested purchasers may 
have a fair opportunity to buy. 

* •* * * * 

Sec, 15. (a) [50 U. S. C. App. Supp. V. sec. 
1624]. Notwithstanding the provisions of any 
other law but subject to the provisions of this 
Act, whenever any Government agency is au- 
thorized to dispose of property under this 
Act, then the agency may dispose of such prop- 
erty by sale, exchange, lease, or transfer, for 
cash, credit, or other property, with or with- 
out warranty, and upon such other terms and 
conditions, as the agency deems proper : * * * 
(b) Any owning agency or disposal agency 
may execute such documents for the transfer 
of title or other interest in property or take 
such other action as it deems necessary or 
proper to transfer or dispose of property or 
otherwise to carry out the provisions of this 
Act, and, in the case of surplus property, shall 
do so to the extent required by the regulations 
of the Board. 

The pertinent provisions of the Act of September 
18, 1945, 59 Stat. 533, c. 368, sees. 1-2, 50 IT. S. C. 
App. Supp. V, sec. 1614a-1614b are as follows: 

That there is hereby established in the Office 
of War Mobilization and Reconversion a Sur- 
plus Property Administration which shall be 
headed by a Surplus Property Administrator. 
The Administrator shall be appointed by the 
President by and with the advice and consent 
of the Senate and shall receive compensation 



20 

at the rate of $12,000 per year. The term of 
office of the Administrator shall be two years. 

Sec. 2. (a) Effective at the time the Surplus 
Property Administrator first appointed under 
this Act qualifies and takes office, the Surplus 
Property Board created by section 5 of the 
Surplus Property Act of 1944 is abolished, all 
of its functions are transferred to, and shall 
be exercised by, the Surplus Property Admin- 
istrator, and all of its personnel (except the 
members thereof), records, and property (in- 
cluding office equipment) are transferred to, 
and shall become, respectively, the personnel, 
records, and property of the Surplus Property 
Administration. 

***** 

(c) All regulations, policies, determinations, 
authorizations, requirements, designations, and 
other actions of the Surplus Property Board, 
made, prescribed, or performed before the 
transfer of functions provided by subsection 
(a) of this section shall, except to the extent 
rescinded, modified, superseded, or made in- 
applicable by the Surplus Property Adminis- 
trator, have the same effect as if such transfer 
had not been made; but functions vested in the 
Surplus Property Board by any such regula- 
tion, policy, determination, authorization, re- 
quirement, designation, or other action shall, 
insofar as they are to be exercised after the 
transfer, be considered as vested in the Surplus 
Property Administrator. 

***** 

The pertinent provisions of Executive Order No. 
9689, 11 Fed. Reg. 1265 (1946) are as follows: 

CONSOLIDATION OF SURPLUS PROPERTY FUNCTIONS 

Whereas the Surplus Property Administra- 
tion has now substantially completed the per- 
formance of its policy-making functions, the 



21 

War Assets Corporation is now vested with the 
major part of domestic surplus property dis- 
posal, and the State Department is now vested 
with the major part of foreign surplus property 
disposal ; and 

Whereas, alter a reasonable period in which 
to make necessary administrative arrangements, 
it will be feasible and desirable to establish a 
War Assets Administration as a separate agency 
directly responsible to the President to exercise 
consolidated functions relating to the disposal 
of domestic surplus property; 

Now therefore, by virtue of the authority 
vested in me by the Constitution and Statutes, 
including Title I of the First War Powers Act, 
1941 (55 Stat. 838), and as President of the 
United States, it is hereby ordered as follows: 

1. The functions of the Surplus Property 
Administrator and of the Surplus Property 
Administration are hereby transferred, except 
as otherwise provided herein, to the chairman 
of the board of directors of the War Assets 
Corporation, and to the War Assets Corpora- 
tion, respectively, and the Surplus Property 
Administration shall be deemed merged into 
and consolidated with the War Assets Cor- 
poration. 

2. All functions of the Surplus Property 
Administrator and the Surplus Property Ad- 
ministration which relate to surplus property 
located outside the continental United States, 
Hawaii, Alaska (including the Aleutian 
Islands), Puerto Rico, and the Virgin Islands 
are transferred to the Secretary of State and 
the Department of State, respectively. 

3. Effective March 25, 1946 (a) there shall 
be established, in the Office for Emergency 
Management of the Executive Office of the 
President, a War Assets Administration at the 
head of which there shall be a War Assets 
Administrator, who shall be appointed by the 



22 

President by and with the advice and consent 
of the Senate, and who shall receive a salary 
at the rate of $12,000 per annum unless the 
Congress shall otherwise provide, and (b) the 
functions of the War Assets Corporation rela- 
tive to surplus property and of the Chairman 
of the board of directors of the War Assets 
Corporation relative to surplus property shall 
be transferred to the War Assets Adminis- 
trator. 

4. There shall be transferred to the agencies 
to which functions are transferred by this 
order so much as the Director of the Bureau 
of the Budget shall determine to relate pri- 
marily to such functions, respectively, of the 
records, administrative property, personnel, 
and funds of the Surplus Property Adminis- 
tration, the Office of War Mobilization and 
Reconversion, the Reconstruction Finance Cor- 
poration, and the War Assets Corporation. 
All authorizations, commitments, or other obli- 
gations incurred as a disposal agency by the 
Reconstruction Finance Corporation or by the 
War Assets Corporation under the Surplus 
Property Act of 1944 shall be transferred to 
the War Assets Administration upon its estab- 
lishment. 

* * * * * 



B. S. GOVERNMENT PRINTING OFFICE: 1947 



No. 11671 



In the United States 

CIRCUIT COURT OF APPEALS 

for the Ninth Circuit 



UNITED STATES OF AMERICA, 

Appellant, 
v. 

SHOFNER IRON AND STEEL WORKS, 
a corporation, 

Appellee. 



Appeal from the District Court of the United States 
for the District of Oregon. 



APPELLEE'S BRIEF 



MacCormac Snow, 
Albert M. Hodler, 

Attorneys for Appellee. 



PAUL P, O'BHIEN, 

OLERK 



STEVIHt-NESI LAW PUB CO.. PORTLAND 



INDEX 

Page 

Statement - - 1 

Argument ~ 3 

Forcible Entry and Detainer Statute of Oregon 6 

Ejectment Statute of Oregon 11 



LIST OF CASES 

Page 

Bobell v. Wagenaar, 106 Or. 232, 244 12 

Coles v. Meskimen, 48 Ore. 54, 56 12 

Comegys v. Hendricks, 55 Ore. 533 12 

Denee v. Ankeny, 246 U.S. 208 6, 11, 12 

Erie Railway v. Tompkins, 304 U.S. 64, 78 6 

Holt v. Nixon (CCA 7) 141 Fed. 952 5 

Iron Mountain Ry. v. Johnson, 119 U.S. 608 5 

Lang Co. v. Fort, (CCA 3) 76 Fed. (2) 27, 29 5 

Miles v. Caldwell, 2 Wall. 35 .5, 6 

Phillipi v. Thompson, 8 Ore. 428 12 

Purcell v. Edmunds, 175 Ore. 68, 70 8 

Schroeder v. Woody, 166 Ore. 93, 96, 97 7 

Smith v. McCann, 24 How. 398, 403 12 

Twiss v. Boehmer, 39 Ore. 359 8 

United States v. Stein, (N.D. Oh. Ed.) 48 Fed. (2) 

626 - 4 

Weber v. Grand Lodge, (CCA 6) 169 Fed. 522; reh. 

den. 171 Fed. 839; Cert. Den. 215 U.S. 161 5 

Wilcox v. McConnell, 13 Pet. 496, 516 5 

LIST OF STATUTES AND TEXTS 

Cyclopedia of Federal Procedure 5 

28 C.J.S. 856, Sec. 10... 12 

1 O.C.L.A. 8-201 et seq 12 

1 O.C.L.A. 8-301 to 8-328 6, 7 

15 U.S.C. 604 9 



No. 11671 



In the United States 

CIRCUIT COURT OF APPEALS 

for the Ninth Circuit 



UNITED STATES OF AMERICA, 

Appellant, 
v. 

SHOFNER IRON AND STEEL WORKS, 
a corporation, 

Appellee. 



Appeal from the District Court of the United States 
for the District of Oregon. 



APPELLEES BRIEF 



STATEMENT 

Taking the amended complaint by its four corners 
the allegations of the first cause of action (R. 16-18) are 
these : 

The Appellee, Shofner Iron and Steel Works, orig- 
inally owned and was in possession of certain real estate 
described as "Tract I", situated in Multnomah County, 
Oregon. In September, 1942, Appellee leased this land 
from Defence Plant Corporation and remained in posses- 



2 United States of America v. 

sion thereof. On January 30, 1943, Appellee deeded the 
land to Defence Plant Corporation and still remained 
in possession under the lease. Reconstruction Finance 
Corporation succeeded to the interests of DPC and can- 
celled the lease. Shofner remained in possession and is 
still in possession. RFC declared the land surplus under 
the Surplus Property Act. Appellee, it is said, wrong- 
fully withholds possession from the United States. 

The allegations of the second cause of action are: 

Shofner was in possession of other real estate in 
Multnomah County, Oregon, described as "Parcel 1" 
and "Parcel 2". On September 28, 1943, Appellee leased 
this land to the United States for a term extending until 
1963, but remained in possession. The Government has 
complied with all conditions of the lease. Appellee is 
still in possession and unlawfully withholds possession 
from Appellant, the United States. 

Both causes of action concern Oregon real estate. In 
both, possession of the land in Appellee is alleged to be 
unlawful as against the United States. In the first cause 
of action title is alleged to be in RFC, and in the second 
it is said to be in Appellee. In neither is title alleged to 
be in the United States. 

In the first the relation of landlord and tenant be- 
tween RFC and Appellee is alleged to have ceased; in 
the second that relation between Appellee and the Gov- 
ernment is said still to persist. 

In the first cause of action the United States does 
not claim to have received any transfer of RFCs title 



Shofner Iron and Steel Works 3 

to the land. The only claim is that RFC transferred 
"jurisdiction over said premises" to War Assets Adminis- 
tration. 

In the second cause of action it is not alleged that 
the lease from the Appellee to the Appellant was de- 
clared surplus. The Surplus Property Act is not involved 
here. 

In both causes of action the United States seeks 
possession only. In neither does the Government seek 
to try the title. In the second cause of action it does not 
claim title, but claims only leasehold rights. In the first 
it alleges title in RFC, but does not allege that that title 
has been or is denied or threatened, nor does it seek to 
quiet the RFC's title. 

The action as a whole is one which in Oregon is 
called forcible entry and detainer. 

ARGUMENT 

The grounds upon which the United States seeks 
possession of the property described in the two causes 
of action are, (1) Surplus Property Act, and (2) under 
the claim that the United States can sue in its own name 
on any cause of action belonging to RFC. 

Neither of these grounds applies to the second cause 
of action. The leasehold recited therein is not alleged 
to have been declared surplus under the Surplus Prop- 
erty Act, and the leasehold is alleged to be in the name 
of the United States. Moreover, Appellee's motion to 
dismiss did not reach the second cause of action. We 



4 United States oi America v. 

so stated to Judge Brown, and in his decision (Sup. R. 

) he denied Appellee's motion so far as the second 

cause of action is concerned. The United States then 
applied for and took a dismissal of the second cause of 
action without prejudice (R. 28-29). The Government 
has not appealed (R. 30) and cannot appeal from its 
own dismissal order. The second cause of action is not 
before this Appellate Court.* 

We address ourselves to the first cause of action. 
The cases recited by Appellant on Pages 12 and 13 of 
its brief are not in point. They hold that where a debt 
or obligation exists in favor of a government owned cor- 
poration and against a citizen, either the United States 
alone or the United States and its corporation can bring 
suit thereon. But these cases are all for money demands. 
None of them are for the recovery of possession of real 
property; none of them are based on the relation of 
landlord and tenant such as appears in the first cause 
of action. None are grounded on state statutes. 

Only one case related to real estate, namely United 
States v. Stein, (N.D. Oh. Ed.) 48 Fed. (2) 626. Here 
the United States sought to quiet title to real estate and 
also asked an injunction against continuing trespasses 
thereon. During the first World War, the United States, 
through the Secretary of Labor, requisitioned the real 
property in question. This was after the United States 
Housing Corporation had contracted to buy the property 



*This Court may well wonder why, in the middle of the war, when DPC 
appeared to be handling the plant situation with regard to the Appellee, 
the United States should have taken a lease in its own name to a por- 
tion of Appellee's plant. The answer is it did not; the second cause of 
action is untrue. This lease ran to DPC, not to the Government. 



Shofner Iron and Steel Works 5 

and the owner had refused to comply with his contract. 
Following the requisition, the owner exhibited recalci- 
trance and trespassed upon the property and attempted 
to convey the title, and otherwise impeded the Govern- 
ment. The United States had its decree by force of the 
Ohio law. 

The case bears no relation to that alleged in the first 
cause of action or to any of the other cases cited by the 
Government in its brief. The first cause of action is a 
claim of a landlord against a tenant and charges that 
the tenant has refused to vacate real property after the 
termination of a lease. This is a common ground for 
an action of forcible entry and detainer. 

But the Government is a stranger to both the lease 
and the deed. Its only relation to these instruments is 
that it owns the stock of RFC. 

Federal Courts do not have jurisdiction of forcible 
entry and detainer actions except by operation of state 
statutes; Weber v. Grand Lodge, (CCA 6) 169 Fed. 
522; reh. den. 171 Fed. 839; Cert. Den. 215 U.S. 616; 
Iron Mountain Ry. v. Johnson, 119 U.S. 608; Holt v. 
Nixon, (CCA 7) 141 Fed. 952; Miles v. Caldwell, 2 
Wall. 35; Wilcox v. McConnell, 13 Pet. 496, 516; Lang 
Co. v. Fort, (CCA 3) 76 Fed. (2) 27, 29. 

In 13 Cyclopedia of Federal Procedure, 2d Ed., 514, 
Sec. 6953, the editors say: 

"There are no federal statutes governing eject- 
ment actions in general in the federal courts, and 
there is no rule of the Federal Rules of Civil Pro- 
cedure which specifically mentions such actions." 



6 United States oi America v. 

The same is true of forcible entry and detainer. 

In Denee v. Ankeny, 246 U.S. 208, 213, the Supreme 
Court of the United States quoted with approval the 
Supreme Court of Washington as follows: 

" 'The United States statutes have made no pro- 
vision for determining conflicting rights under claim 
of possession but the determination of these rights 
is left to the states to be regulated.' " 

We quote from Miles v. Caldwell, 2 Wall. 35: 

"Reverting now to the question of policy 
grounded on the supposed sanctity of land titles as 
affecting the conclusiveness of judgments in tres- 
pass or ejectment we remark that it is the settled 
doctrine of all courts in reference to all questions 
affecting the title to real estate to permit the dif- 
ferent states of the union to settle them each for 
itself; and when the point involved is one which 
becomes a rule of property, we follow the statutes 
of the states or their views of the general policy.' , 

The doctrine of the cases last cited is the more true 
in the light of Erie Railway v. Tompkins, 304 U.S. 64, 
78, where the court said: 

"Except in matters governed by the Federal 
Constitution or by Acts of Congress the law to be 
applied in any case is the law of the state." 



FORCIBLE ENTRY AND DETAINER 
STATUTE OF OREGON 

Thus the Oregon Statute is brought under examina- 
tion of this court. This statute will be found in I O.C. 
L.A. 8-301 to 8-328. The first ten sections of the Oregon 



Shoiner Iron and Steel Works 7 

statute define tenancies and provide for notices ter- 
minating the same. Section 8-313 is the section which 
authorizes actions in forcible entry and detainer. This 
section reads as follows: 

"Action for forcible entry or wrongful detainer. 
When a forcible entry shall be made upon any 
premises or when an entry shall be made in a peace- 
able manner and the possession shall be held by 
force, the person entitled to the premises may main- 
tain in the county where such property is situated 
an action to recover the possession thereof in the 
circuit court of said county, or before any justice of 
the peace of said county." 

In Schroeder v. Woody, 166 Ore. 93, 96, 97, the 
Court said with respect to the action of forcible entry 
and detainer that it is statutory and of a special sum- 
mary nature and is in derogation of the common law; 
that the statute must be strictly construed, and applies 
only as between landlord and tenant. The court sus- 
tained a demurrer to a complaint by a vendor against a 
vendee. We quote: 

(96) 'Since the action of forcible entry and de- 
tainer is a special statutory proceeding, summary 
in its nature, and in derogation of the common law, 
it is a rule of universal application in such actions 
that the statute conferring jurisdiction must be 
strictly pursued in the method of procedure pre- 
scribed by it, or the jurisdiction will fail to attach, 
and the proceeding be coram non judice and void. 
Even if the action is tried in a court of record, the 
latter does not proceed therein by virtue of its 
power as a court of general jurisdiction, but derives 
its authority wholly from the statute, and in such 
proceeding is, therefore, to be treated as a court of 
special and limited jurisdiction.' " 



8 United States of America v. 

(97) " 'It seems also clear that the unlawful holding 
by force, as defined in section 8-311, refers only to 
cases where the relation of landlord and tenant ex- 
ists and, as this is not such a case, there is no 
authority conferred by the statute for the bringing 
of an action in this form.' " 

In Twiss v. Boehmer, 39 Ore. 359, the defendant had 
entered peacefully and defended on the ground that he 
was not a tenant of the plaintiff. The plaintiff owned 
the property, and the court examined the relations be- 
tween the parties and concluded that the relation of 
landlord and tenant existed and ousted the defendant. 
Mr. Justice R. S. Bean said (362): 

"It has been decided by this court that the sum- 
mary remedy given by Chapter XLIV, Hill's Ann. 
Laws, for the forcible entry and detainer of land, 
is not a substitute for an action of trespass or eject- 
ment, but is confined to cases where the entry or 
detention is by force (Taylor v. Scott, 10 Or. 483; 
Harrington v. Watson, 11 Or. 143, 50 Am. Rep. 465, 
and note, 3 Pac. 173); or where the relation of 
landlord and tenant exists between the parties, and 
the tenant, who is holding over after the expiration 
of his term, or has forfeited his right to the posses- 
sion, refuses to vacate, after note to quit: Hislop v. 
Moldenhauer, 21 Or. 208 (27 Pac. 1052)." 

In the case of Purcell v. Edmunds, 175 Ore. 68, 70, 
the defendants purchased the rights of a purchaser of 
the property and the plaintiff was the owner. The action 
of forcible entry and detainer was attempted, but both 
the trial and Supreme Courts held that such an action 
would not lie. The court said (70): 

"The judgment for the defendants must be af- 
firmed, on the authority of Schroeder v. Woody, 



Shofner Iron and Steel Works 9 

166 Or. 93, 109 P. (2d) 597. In that case it was 
pointed out that an action of forcible entry and de- 
tainer is a special statutory proceeding, in deroga- 
tion of the common law. It was there decided that 
the Oregon statute in reference to forcible entry 
and detainer, Sees. 8-311 to 8-324, both inclusive, 
O.C.L.A., is limited to cases in which the relation 
of landlord and tenant exists, except when the entry 
has been made forcibly. The summary remedy 
given by statute for the forcible entry and detainer 
of land is not a substitute for an action of trespass 
or ejectment: Twiss v. Boehmer, 39 Or. 359, 65 P. 
18." 

We have cited the Supreme Court and other Federal 
authorities to the effect that the present action is 
grounded upon the Oregon statute. We have quoted 
the statute and have cited the Oregon cases construing 
the same. The action of forcible entry and detainer in 
Oregon is statutory and is in derogation of the common 
law and must, in any case, be brought strictly under 
the statute. It is restricted to cases between the land- 
lord and tenant. 

There is no relation of landlord and tenant between 
the United States and Shofner Iron & Steel Works. The 
first cause of action alleges such a relation as between 
RFC and the Appellee but not as between the Govern- 
ment and the Appellee. The cases cited by the Govern- 
ment to the effect that the United States can bring suit 
for a money judgment or on an obligation due one of its 
corporations, proceed without the aid of state statutes. 
Federal corporations are organized under acts making 
various provisions concerning suits. The Reconstruction 
Finance Corporation Act authorizes the RFC (15 U.S.C. 
604): 



10 United States of America v. 

"To sue and be sued, to complain and to defend, 
in any court of competent jurisdiction, state or fed- 
eral." 

The relationship of landlord and tenant exists under 
the first cause of action between RFC and the Appellee. 
Under the facts alleged in the first cause of action, the 
RFC could bring a suit under the Oregon statute for 
forcible entry and detainer in a state court for Mult- 
nomah County, Oregon, or in the District Court of the 
United States for the District of Oregon. The United 
States cannot maintain the present suit without doing 
violence to the Oregon statute. It is one thing for the 
Federal courts to look behind the corporate veil suf- 
ficiently to allow the Government to bring suit or join 
as plaintiff in a suit on a promissory note payable to 
RFC; it is entirely another thing to find the relationship 
of landlord and tenant within the meaning of the Ore- 
gon statute between the Government and an Oregon 
citizen in respect to Oregon real estate growing out of a 
lease to DPC or RFC. We submit that Judge Brown 
was right and that this court should not carry the prin- 
ciple of the cases cited in the Government's Brief to the 
extent of disregarding the Oregon statute on tenancy 
and forcible entry and detainer or the construction of 
that statute as adopted by the Supreme Court of Ore- 
gon. 

Nor is there anything in the Surplus Property Act 
which permits or justifies the overriding of the Oregon 
Statute. As pointed out by the Government's Brief, 
the Surplus Property Act recognizes owning and dis- 
posal agencies. The RFC is the owning agent with re- 



Shofner Iron and Steel Works 11 

spect to the real property described in the first cause of 
action. The provision of the Surplus Property Act with 
respect to the duty of the disposal agency cannot amend 
or override the statute of Oregon with respect to acts of 
forcible entry and detainer. If the disposal agency re- 
quires possession of this real estate in order to perform 
its functions, the owning agency, having the only exist- 
ing right to bring suit for that possession, should do so 
and should eventually secure possession for the disposal 
agency. 

The construction of the Surplus Property Act which 
the Government seeks this court to adopt impinges upon 
and disregards the Oregon statute and it is contrary to 
the expression of the Supreme Court in Denee v. Ankeny 
supra. The construction of the Surplus Property Act 
which we seek this court to adopt recognizes the sover- 
eignty of Oregon and validity of its statutes and at the 
same time suggests a means by which the disposal 
agency can, with any proper aid which the owning 
agency can give, perform the functions required of it by 
the Act. 

EJECTMENT STATUTE OF OREGON 

Before the District Court when we cited the Oregon 
statutes and decisions on forcible entry and detainer, 
the United States Attorney took the position that the 
case at Bar was a suit in ejectment and not in forcible 
entry and detainer. We doubt whether the Government 
will take this position in its reply brief, but since this 
is the only brief we anticipate writing in this case, we 



12 United States of America v. 

will discuss the Oregon ejectment statute. This will be 
found at 1 O.C.L.A. 8-201 et seq. Sec. 8-201 provides 
as follows: 

"Any person who has a legal estate in real prop- 
erty, and a present right to the possession thereof, 
may recover such possession, with damages for 
withholding the same, by an action at law. Such 
action shall be commenced against the person in 
the actual possession of the property at the time, 
or if the property be not in the actual possession of 
anyone, then against the person acting as the owner 
thereof." 

Under this statute the Oregon Court has always held 
that plaintiff in ejectment must show a good legal title 
and a present right of possession in himself and that he 
cannot recover on the weakness of the defendant's title. 
Phillipi v. Thompson, 8 Ore. 428; Coles v. Meskimen, 
48 Ore. 54, 56; Comegys v. Hendricks, 55 Ore. 533; 
Bobell v. Wagenar, 106 Or. 232, 244. 

This is the requirement of the ejectment statutes of 
practically all states. 28 C.J.S. 856, Sec. 10. 

There is no general ejectment statute to be found in 
the United States Code. In ejectment actions as well 
as in those of forcible entry and detainer, the federal 
courts follow the rule of property of the state in which 
the land is located. Again we refer the court to Denee 
v. Ankeny, 246 U.S. 208, and the cases cited with it. 

Smith v. McCann, 24 How. 398, 403, was an eject- 
ment suit under the Maryland statute. Chief Justice 
Taney said: 

(403) "In Maryland . . . the action of ejectment 



Shofner Iron and Steel Works 13 

is the only mode of trying title to lands. And in 
that action the lessor of the plaintiff must show a 
legal title to himself to the land he claims and a 
right of possession under it . . . nor is the defend- 
ant required to show any title in himself." 

If the first cause of action is treated as ejectment 
rather than forcible entry and detainer, the United 
States, as plaintiff, is met by an even stronger statutory 
bar than is offered by the Oregon statute on the latter 
action. To recover in ejectment, the Government cannot 
rely on the weakness, if any, of the Appellee's title. It 
must prove a "strict legal title" in itself. This the Gov- 
ernment does not allege. On the contrary, the allega- 
tions are a legal title in RFC. If this court is asked by 
the Government, in a reply brief, to draw aside the 
corporate veil of RFC and by that process to find a 
"strict legal title" in the Government for the purpose 
of satisfying the Oregon Ejectment Statute, this would 
constitute a total disregard of that statute and could 
not possibly fall under the head of interpretation or 
construction. 

We see no reason why this court should impinge 
upon or destroy the integrity of the Oregon statutory 
law upon which the sanctity of its real estate titles re- 
lies. Reconsruction Finance Corporation, as a plaintiff, 
in either an ejectment suit or one for forcible entry and 
detainer satisfies the requirement of the Oregon law. 

We do not mean to suggest by this brief that the 
Government be deprived of such lawful right as it may 
have to dispose of the real property described in the 
first cause of action as surplus. We see no reason why 



14 United States of America v. 

RFC cannot bring a suit to recover its possession and 
upon doing so turn its possession over to War Assets 
Administration. If Appellee is able to assert against 
RFC a defense to a suit for forcible entry and detainer 
or ejectment, which defense might not be available as 
against the Government itself, then the RFC, in at- 
tempting to turn this property over to War Assets Ad- 
ministration without securing possession, is attempting 
to turn over more than it has, and should be restrained. 
If there are weaknesses or flaws in the title of RFC, 
which the Appellee might assert as against RFC, but not 
as against the Government, the Appellee should not be 
deprived of its lawful right or opportunity to rely upon 
the same. 

The orderly disposal of the real property described 
in the first cause of action does not require or justify 
the act which the Government seeks to accomplish in 
this suit or the destroying of the Oregon statutory law 
which would be brought about if the Government were 
allowed to succeed in its purpose. 

We respectfully submit that Judge Brown's decision 
should be upheld and that the RFC should be left with 
the problem of securing possession of this land and turn- 
ing that possession over to the War Assets Administra- 
tion if there should be any need for such action. 

Respectfully submitted, 

MacCormac Snow, 
A. M. Hodler, 

Attorneys for Appellee. 



No. 11671 



In the United States Circuit Court of Appeals 
for the Ninth Circuit 



United States of America, appellant 

v. 

Shofner Iron and Steel Works, a Corporation, 

appellee 



APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES 
FOR THE DISTRICT OF OREGON 



REPLY BRIEF FOR THE UNITED STATES 



A. DEVITT VANECH, 

Assistant Attorney General. 

HENRY L. HESS, 

United States Attorney, 

Portland, Oregon. 

ROGER P. MTARQUIS, 
WILMA C. MARTIN, 

Attorneys, Department of Justice, 

Washington, D. C. 



PAUL P r O'BRIEN, 



.-■•I -ET *"!*.,*• 



INDEX 



Page 
I. The right of the United States to bring an action to recover pos- 
session of sifrplus property of one of its Government corporations 

is not dependent upon or governed by State law 2 

II. Oregon law does not preclude a suit by the United States to recover 
possession of the surplus property of one of its Government 

corporations 6 

Conclusion 9 

CITATIONS 
Cases : 

Board of Comm'rs v. United States, 308 U. S. 343 2 

Carroll v. Price, 81 Fed. 137 8 

Clearfield Trust Co. v. United States, 318 U. S. 363 2 

Cramer v. United States, 261 U. S. 219 2 

Deitrick v. Greaney, 309 U. S. 190 2 

D'Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U. S. 447_ 2 

Erie R. Co. v. Tompkins, 304 U. S. 64 3 

Ewert v. Robinson, 289 Fed. 740 ^ 8 

Feehely v. Rogers, 159 Ore. 361, 80 P. 2d 717 8, 9 

Graves v. New York ex rel. O'Keefe, 306 U. S. 466 4 

King County, Wash. v. United States Ship. Board E. F. Corp., 282 

Fed. 950 5 

Kingsley v. United Rys. Co., 66 Ore. 50, 133 Pac. 785 8 

Malony v. Adsit, 175 U. S. 281 8 

Missouri, etc., Ry. Co. v. Kansas Pac. Ry. Co., 97 U. S. 491 6 

Patterson v. Hamilton, 274 Fed. 363 8 

Pioneer Coal Co. v. Bush, 16 F. Supp. 117 8 

Pittman v. Home Owners' Loan Corporation, 308 U. S. 21 4 

Purcell v. Edmunds, 175 Ore. 68, 151 P. 2d 629 7 

Schroeder v. Woody, 166 Ore. 93, 109 P. 2d 597 7 

Southern Pac. Co. v. Reconstruction Finance Corp., 161 F. 2d 56__ 5 

United States v. Allegheny County, 322 U. S. 174 2, 3, 6 

United States v. New Orleans Pac. Ry. Co., 248 U. S. 507 2 

United States v. San Geronimo Development Co., 154 F. 2d 78, 

certiorari denied 329 U. S. 718 6 

United States v. Shaw, 309 U. S. 495 2 

United States v. Skinner & Eddy Corp., 35 F. 2d 889 6 

United States v. Standard Oil Co., 91 L. Ed. adv. op. 1507, No. 235 

O. T. 1946, decided June 23, 1947 2,4 

United States v. Summerlin, 310 U. S. 414 6 

United States Grain Corp. v. Phillips, 261 U. S. 106 5 

Weather jord v. McKay, 59 Ore. 558, 1 1 7 Pac. 969 8 

(i) 
766484—47 



II 

Statute: Pag« 

Surplus Property Act of October 3, 1944, 58 Stat. 769, c. 479 1, 5 

Miscellaneous: 

Federal Rules of Civil Procedure: 

rule 2 6 

rule 54 (c) 6 

1 Ore. Comp. Laws, Ann. sec. 8-328 8 

4 Thompson, Real Property (Perm. Ed.) sees. 1670, 1671 8 

1 Tiffany, Landlord and Tenant (1910), sec. 37, p. 293 8 



In the United States Circuit Court of Appeals 
for the Ninth Circuit 



No. 11671 

United States of America, appellant 

v. 

Shofner Iron and Steel Works, a Corporation, 

appellee 



APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES 
FOR THE DISTRICT OF OREGON 



REPLY BRIEF FOR THE UNITED STATES 



In our opening brief we pointed out that the 
United States was the proper party to institute the 
present action for two reasons: First, because by 
virtue of the Surplus Property Act Congress has 
given to the War Assets Administration the right to 
possession of this property and has imposed upon 
that agency the duty of preserving and protecting it; 
and, second, because the United States, by virtue of 
its relationship with its wholly-owned corporation, 
may assert a cause of action of RFC. Appellee 
does not directly challenge these propositions, but it 
seeks to avoid their effect by reference to local law 
relating to actions for forcible entry and detainer and 
ejectment. In so doing appellee is urging a ground 

(i) 



not taken by the court below and for reasons to be 
given, we submit that appellee's argument lacks merit. 

I 

The right of the United States to bring an action to recover 
possession of surplus property of one of its Government 
corporations is not dependent upon or governed by State law 

The United States may maintain suits in its own 
courts for the purpose of protecting and enforcing its 
governmental rights and to aid in the execution of its 
governmental policies. Cramer v. United States, 261 
U. S. 219, 232-233 (1923); United States v. New 
Orleans Pac. By. Co., 248 U. S. 507, 518 (1919). 
When the United States appears as a litigant as- 
serting a right arising out of its governmental activi- 
ties, its rights are determined by federal not state 
law. United States v. Standard Oil Co., 91 L. Ed. adv. 
op. 1507, 1509-1513, No. 235, October Term 1946, 
decided June 23, 1947; United States v. Allegheny 
County, 322 U. S. 174, 182-183 (1944); Clearfield 
Trust Co. v. United States, 318 U. S. 363, 366-367 
(1943) ; D'Oench, Duhme & Co. v. Federal Deposit 
Ins. Corp., 315 U. S. 447, 455-456 (1942) ; Deitrick 
v. Greaney, 309 U. S. 190, 200-201 (1940) ; United 
States v. Shaw, 309 U. S. 495 (1940); Board of 
Comm'rs v. United States, 308 U. S. 343, 349-351 
(1939). Thus, in ascertaining the obligation of the 
guarantor of a forged endorsement on a check drawn 
by the United States, the Supreme Court stated in 
the Clearfield case, supra, at pp. 366-367 : 

The rights and duties of the United States on 
commercial paper which it issues are governed 



by federal rather than local law. When the 
United States disburses its funds or pays its 
debts, it is exercising a constitutional func- 
tion or power. * The authority to 
issue the check had its origin in the Constitu- 
tion and the statutes of the United States and 
was in no way dependent on the laws of 
Pennsylvania or of any other state. 
The duties imposed upon the United States 
and the rights acquired by it as a result of the 
issuance find their roots in the same federal 
sources. * * * In the absence of an appli- 
cable Act of Congress it is for the federal 
courts to fashion the governing rule of law 
according to their own standards. 

Similarly in determining whether the United States 
had title to certain machinery so as to exempt it from 
state taxation the Court said in United States v. 
Allegheny County, supra, at pp. 182-183: 

Every acquisition, holding, or disposition of 
property by the Federal Government depends 
upon a proper exercise of a constitutional 
grant of power. * * The validity and 

construction of contracts through which the 
United States is exercising its constitutional 
functions, their consequences on the rights and 
obligations of the parties, the titles or liens 
w T hich they create or permit, all present ques- 
tions of federal law not controlled by the law 
of any state. 

Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), and 
similar cases cited by appellee (Br. 5-6) have no 
application in determining the rights and powers of 
the Federal Government in the performance of its 



governmental functions. United States v. Standard 
Oil Co., and other cases cited supra. 

Appellee states (Br. 5) : "But the Government is 
a stranger to both the lease and the deed. Its only 
relation to these instruments is that it owns the stock 
of RFC." Elsewhere it asserts (Br. 9) that there is 
no relation of landlord and tenant between the United 
States and Shofner but only between RFC and Shof ner. 
Again (Br. 13) it emphasizes that legal title is in 
RFC and not the United States. Thus, appellee's 
entire argument is based upon the assertion that RFC 
and the United States are entirely separate and 
distinct entities and must be so treated by the courts. 
But whether RFC and the United States are to be 
considered independently is a matter upon which 
federal law is controlling. 

Congress in the exercise of its power to provide for 
national defense authorized the acquisition of prop- 
erty by its government-owned corporations (Govt. 
Br. 6). 1 Acting under its power to dispose of that 
property once it was no longer needed for the govern- 
mental purposes for which it was acquired, Congress, 
by enacting the Surplus Property Act, set up a pro- 
cedure and declared a policy for the disposal of sur- 
plus government property, a procedure and a policy 
which apply to property of RFC as well as to property 

1 Every action of the United States within its constitutional 
powers is governmental action whether it acts itself through one of 
its departments or through a corporation which it owns or con- 
trols. Graves v. New York ex rel. O'Keefe, 306 U. S. 466, 477 
(1939) ; Pittman v. Home Owners' Loan Corporation, 308 U. S. 
21,32 (1939). 



administered by the regular departments of the Gov- 
ernment. And, as we have shown (Govt. Br. 7-11) 
Congress has given the War Assets Administration 
the right to possess the federal property here involved 
and has imposed upon it the duty of caring for and 
disposing of that property. 

Moreover, the fact that bare legal title is in RFC 
does not make the property any less the property 
of the United States. As this Court recently pointed 
out in holding that Defense Supplies Corporation 2 
was entitled to ship benzol at land grant rates appli- 
cable to " military or naval property of the United 
States," a there was such identity of interest and 
function between Supplies and the United States that 
ownership of the benzol by Supplies was equivalent 
to ownership by the United States. " Southern Pac. 
Co. v. Reconstruction Finance Corporation, 161 F. 2d 
56, 57-60 (1947). See also King County, Wash. v. 
United States Ship. Board E. F. Corp., 282 Fed. 950, 
953 (C. C. A. 9, 1922). Like the gold involved in 
United States Grain Corp. v. Phillips, 261 U. S. 106, 
113 (1923) the property here involved is in substance 
the property of the United States although legal title 
is in the corporation. Just as it may sue to recover 
rents due under a lease executed by a government corpo- 
ration as it did in United States v. Skinner & Eddy 
Corp., 35 F. 2d 889, 894 (C. C. A. 9, 1929), so the United 
States may sue to recover possession of the leased 

2 RFC created Defense Supplies Corporation under the same 
statutory authority under which it created Defense Plant Cor- 
poration. 



premises wrongfully withheld by the lessee. State 
law cannot defeat the right of the United States to 
protect its governmental interests. Cf . United States 
v. Summerlin, 310 U. S. 414 (1940) . 3 j 

II 

Oregon law does not preclude a suit by the United States to 
recover possession of the surplus property of one of its 
Government corporations 

In the foregoing discussion we have assumed that 
appellee is correct in its contention that the United 
States is not a proper party to bring the action under 
Oregon law. It is submitted, however, that it does 
not follow from the state statutes and decisions relied 
upon (Br. 6, 13) that the United States may not bring 
this action. 

It is immaterial to the question presented on this 
appeal whether the action is one in forcible entry 
and detainer or one in ejectment. 4 The facts alleged 
in the Government's complaint contain the essential 
elements of either cause of action. Appellee's objec- 

3 Whether the interest of the United States in the property of 
its corporations, or more particularly their surplus property, falls 
within any established category of property interests sufficient to 
maintain a suit for its possession under state law, its rights will be 
recognized and enforced in the federal courts. Cf . United States 
v. San Geronimo Development Co., 154 F. 2d 78, 85 (C. C. A. 
1, 1946) certiorari denied 329 U. S. 718 (1946); Missouri, etc., 
Ry. Co. v. Kansas Pac. Ry. Co., 97 U. S. 491, 497 (1878) ; United 
States v. Allegheny County, 322 U. S. 174, 182-183 (1944). 

4 Under rule 2 of the Federal Rules of Civil Procedure, there is 
only one form of action. Under rule 54 (c) every final judgment 
shall grant the relief to which the party in w^hose favor it is rend- 
ered is entitled, even if the party has not demanded such relief in 
his pleadings. 



tions to the maintenance of both actions will, there- 
fore, be treated together. The sole question is whether 
the United States is the proper party to bring the 
action. 

It is first said (Br. 6-9) that the United States 
cannot bring an action of forcible entry and detainer 
because the Oregon law limits this action to cases 
where the relation of landlord and tenant exists. 
That relationship does exist in the case at hand. It 
is true that the lease was not executed in the name 
of the United States, but rather in the name of one 
of its corporations for the purpose of carrying on a 
lawful governmental activity. Questions arising out 
of a relationship similar to that between the United 
States and its government corporations are not likely 
to be found in State cases. However, we know of no 
Oregon case which would indicate that the Oregon 
courts would hold, contrary to the many federal court 
decisions cited above and despite the provisions of 
the Surplus Property Act, that RFC and the United 
States are so separate and distinct that the United 
States could not bring an action of forcible entry 
and detainer under the circumstances presented here. 
The cases cited by appellee (Br. 7-9) do not so 
indicate. In neither Schroeder v. Woody, 166 Ore. 
93, 109 P. 2d 597 (1941) nor Pur cell v. Edmunds, 175 
Ore. 68, 151 P. 2d 629 (1944) was there any landlord 
and tenant relationship. Both cases involved the 
rights of a vendor as against a vendee. 

But regardless of whether an action of forcible 
entry and detainer is appropriate under the circum- 



8 

stances, the facts alleged in the complaint clearly 
support an action in ejectment. 5 

Appellee contends that the United States cannot 
maintain ejectment because the Government cannot 
rely on the weakness, if any, of appellee's title, but 
must prove "strict legal title" in itself (Br. 13). 
Here again, there is nothing in the cases cited (Br. 
12) which indicates that the Oregon courts would hold 
that despite the relationship between the United 
States and RFC and despite the provision of the 
Surplus Property Act, the United States could not 
bring an action of ejectment to recover possession of 
the property. Moreover, contrary to appellee's con- 
tention, there are numerous cases in Oregon in which 
a party has been held entitled to maintain an action 
in ejectment although his interest in the property was 
something less than " strict legal title.' 1 E. g., Weath- 
er ford v. McKay, 59 Ore. 558, 117 Pac. 969 (1911) ; 
Kingsley v. United Rys. Co., 66 Ore. 50, 133 Pac. 785 
(1913) ; Feehely v. Rogers, 159 Ore. 361, 372-376, 80 
P. 2d 717 (1938) ; see also Malony v. Adsit, 175 U. S. 
281, 288-290 (1899) ; Patterson v. Hamilton, 274 Fed. 
363 (C. C. A. 9, 1921) ; Carroll v. Price, 81 Fed. 137 
(D. Alaska 1896) ; Ewert v. Robinson, 289 Fed. 740, 
750-754 (C. C. A. 8, 1923) ; 1 Tiffany, Landlord and 
Tenant (1910), sec. 37, p. 293. As the Oregon 

5 The statutory proceeding of forcible entry and detainer is 
not exclusive and does not supersede any other remedies which 
the party may have, such as ejectment. 1 Ore. Comp. Laws, 
Ann. sec. 8-328; see also Pioneer Coal Co. v. Bush, 16 F. Supp. 
117, 119 (E. D. Ky. 1936) ; 4 Thompson, Real Property (Perm. 
Ed.) sec. 1670, p. 170, sec. 1671, p. 172. 



9 

Supreme Court pointed out in Feehely v. Rogers, 
supra, at page 376, the right to possession of the 
land is the material issue in an ejectment action and 
the action should be prosecuted in the name of the 
real party in interest, i. e., the one who has the right. 
Inasmuch as the United States (acting through the 
War Assets Administration) has the right to posses- 
sion and control of surplus property of RFC, it is 
the real party in interest in an action to recover its 
possession. 

CONCLUSION 

It is submitted that the right of the United States 
to bring an action in the federal courts to recover 
possession of surplus property of RFC is to be 
determined according to federal, not state law. It 
is further submitted, however, that the statutes and 
decisions of the state of Oregon do not preclude the 
bringing of such an action by the United States. The 
judgment below should, therefore, be reversed. 
Respectfully, 

A. Devitt Vanech, 

Assistant Attorney General. 
Henry L. Hess, 
United States Attorney, 

Portland, Oregon. 
Roger P. Marquis, 
Wilma C. Martin, 
Attorneys, Department of Justice, 

Washington, D. C. 

November 1947. 



U. S. GOVERNMENT PRINTING OFFICE: 1947 



No. 11679 



IN THE 

Unite* States 
Circuit Court of Appeals; 

FOR THE NINTH CIRCUIT 



HARRY C. KELLY, 

Appellant, 

vs. 

P. J. SQUIER, Warden, United States 
Penitentiary, McNeil Island, Washington, 

Appellee. 



ON APPEAL FROM THE DISTRICT COURT OP THE UNITED 
STATES FOR THE WESTERN DISTRICT OF WASHINGTON 

SOUTHERN DIVISION 



HONORABLE CHARLES H. LEAVY, Judge 



BRIEF OF APPELLEE 



J. CHARLES DENNIS, 

United States Attorney 

GUY A. B. DOVELL, 

Assistant United States Attorney 

Attorneys for Appellee. 



OFFICE AND POSTOFFICE ADDRESS- 
324 FEDERAL BUILDING 
TACOMA 2. WASHINGTON 



BALLARD NEWS, SEATTLE, WASHINGTON -- 7/ll/47 -- 45 COPIES 



No. 11679 



IN THE 

WLnittb States 
Circuit Court of appeal* 

FOR THE NINTH CIRCUIT 



HARRY C. KELLY, 

Appellant, 

vs. 

P. J. SQUIER, Warden, United States 
Penitentiary, McNeil Island, Washington, 

Appellee. 



ON APPEAL FROM THE DISTRICT COURT OF THE UNITED 
STATES FOR THE WESTERN DISTRICT OF WASHINGTON 

SOUTHERN DIVISION 



HONORABLE CHARLES H. LEAVY, Judge 



BRIEF OF APPELLEE 



J. CHARLES DENNIS, 

United States Attorney 

GUY A. B. DOVELL, 

Assistant United States Attorney 

Attorneys for Appellee. 



OFFICE AND POSTOFFICE ADDRESS- 
324 FEDERAL BUILDING 
TACOMA 2, WASHINGTON 



BALLARD NEWS, SEATTLE, WASHINGTON -- 7/l l/47 -- 45 COPI ES 



INDEX 

Page 

QUESTION INVOLVED 1 

STATEMENT 2 

ARGUMENT 5 

CONCLUSION 9 

TABLE OF CASES CITED 

Ballard v. United States, 329 U.S. 187 .. . 8 

Harlan v. McGourin, 218 U.S. 442 8 

Kaizo v. Henry, 211 U.S. 146 7 

Kelly v. Johnston, 111 F. (2d) 613, cert, denied, 
312 U.S. 691, rehearing denied 312 U.S. 
715.. 2,3,4 

Kelly v. Johnston, 128 F. (2d) 793 cert, denied 317 
U.S. 699, rehearing denied 318 U.S. 798 3, 4 

Kelly v. United States, 135 F. (2d) 919 3 

Kelly v. United States, 138 F. (2d) 489, cert, 
denied 324 U.S. 855, rehearing denied 324 U.S. 
888 4 

Redmon v. Squier, Warden, (CCA. 9 decided May 
16,1947) 5,8 

United States v. Gale, 109 U.S. 65 6 

United States ex rel McCann v. Thompson, 56 F. 
Supp. 661, aff'd 144 F. (2d) 604, cert, denied 323 
U.S. 790 • 8 

Wilson, Ex parte, 140 U.S. 575 7 

STATUTES CITED 

Title 18, U.S.C.A. 320 2 

Title 18, U.S.C.A. 556a • 8 



No. 11679 
IN THE 

Winittb States 
Circuit Court of appeal* 

FOR THE NINTH CIRCUIT 



HARRY C. KELLY, 

Appellant, 

vs. 

P. J. SQUIER, Warden, United States 
Penitentiary, McNeil Island, Washington, 

Appellee. 



ON APPEAL FROM THE DISTRICT COURT OF THE UNITED 
STATES FOR THE WESTERN DISTRICT OF WASHINGTON 

SOUTHERN DIVISION 



HONORABLE CHARLES H. LEAVY, Judge 



BRIEF OF APPELLEE 

QUESTION INVOLVED 

Did the systematic exclusion of women from the 
grand jury panel and the grand jury drawn there- 
from that returned the indictment against the ap- 
pellant herein upon the charge of which he was con- 
victed and later sentenced and committed render such 
indictment void thereby involving a denial of due 



process, and the conviction subject to attack on such 
ground in a habeas corpus proceeding? 

STATEMENT 

On September 21, 1932, an indictment containing 
two counts was returned against Harry C. Kelly, the 
appellant herein, in the Southern Division of the Unit- 
ed States District Court for the Northern District of 
California, which charged him in Count One with 
robbing a person having lawful charge, control and 
custody of mail matter and, in effecting the robbery, 
putting such person's life in jeopardy by the use of a 
dangerous weapon, contrary to 18 U.S.C. 320 (R. 
6-7). Thereafter on September 23, 1932, appellant 
was arraigned, pleaded guilty to Count One of the 
indictment and was sentenced to a term of impris- 
onment for the period of twenty-five years. (R. 8). 

Appellant was just received at the McNeil Island 
Penitentiary on October 9, 1932 (R. 10). On March 
21, 1933 he was transferred to the United States 
Penitentiary at Leavenworth, Kansas, and on Sep- 
tember 4, 1934, was transferred to the United States 
Penitentiary at Alcatraz, California. (See Kelly v. 
Johnston, 111 F. (2d) 613), and on January 8, 1946 
was returned to McNeil Island from Alcatraz. 

While at Alcatraz, the appellant made at least 



five applications for Writ of Habeas Corpus, some of 
which culminated in appeals. 

In Kelly v. Johnston, 111 F. (2d) 613, appellant 
denied he was informed of his right to counsel, but 
the appellate court found otherwise and affirmed the 
district court's decision. 

In Kelly v. Johnston, 128 F. (2d) 793, appellant 
repeated his former grounds and in addition sought 
to show the stamps taken in the robbery were not mail 
matter within the contemplation of the statute. The 
appellate court affirmed the District Court, and due 
to appellant's record of convictions did not feel dis- 
posed to recommend that his sentence be commuted by 
the President to the time then served. 

In addition to the foregoing proceedings, appel- 
lant's motion for appointment of counsel to repre- 
sent him on appeal in forma pauperis from denial of 
motion to vacate and set aside his judgment and sen- 
tence was denied by the court. 

Kelly v. United States, 135 F. (2d) 919. 

The appellant represented himself in his afore- 
mentioned appeal, after the court's denial to appoint 
counsel and the appellate court affirmed the order 
of the district court denying his motion to vacate and 



set aside the judgment and sentence. (R. 12). 
Kelly v. United States, 138 F. (2d) 489. 

These denials in the District Court of California 
and in the Circuit Court of Appeals did not satisfy 
appellant's craving for judicial determination, and 
from each appellate court decision, except the motion 
for counsel he sought and was denied a writ of cer- 
tiorari by the Supreme Court, as well as a rehearing 
thereon, respectively. 

Kelly v. Johnston, 312 U.S. 691, 715; 

Kelly v. Johnston, 317 U.S. 699, and 318 

U.S. 798; 

Kelly v. United States, 324 U.S. 855, 888. 

The appellant filed his present application for 
Writ of Habeas Corpus on April 4, 1947 (R. 5) with 
the District Court, and appellee was thereupon or- 
dered to show cause on April 29, 1947, of the deten- 
tion of appellant (R. 16-17). 

To the order to show cause, appellee filed his re- 
sponse on April 23, 1947 (R. 21) and produced in 
court the body of the appellant at time of return and 
hearing on April 29, 1947 (R. 22, and transcript 
hearing). 

The appellant at time of said hearing made oral 
traverse to appellee's return and confined the issue 
to the question hereinbefore stated, (R. 23, where- 



upon the District Court, after full hearing. Tran- 
script Hearing, pages 1-20, R. "-" entered its 
order denying the application and dismissing the 
action. ( R. 2 _4 From that final order appellant 

brought this appeal in forma pauperis, 
27-36), leave to s appeal having been indicated by 
the L rt at the time of said hearing. Tr. 

ring 19) and prior to this cor m in 

Redman v. Squier, Warden, on May 16, 194" 

ARGUMENT 

Appellant's extensive reasoning set forth in his 
brief is based entirely upon the premise that disnm 
of an indictment in a criminal cause upon grounds 
of en ion of women from the grand jury panel, and 
so from the grand jury returning the indictmen: 
a determination that such indictment is beyond all 
question void 

Tne fact that appellant plead guilty to the count 
of the indictment upon which he was sentenced and 
committed seems in no way to soothe his belated feel- 
ing of having been slighted in proceedings that ad- 
mittedly lacked feminine adornment and above all 
in a state so endowed. 

As earlv as October 15, 1883, the Supreme Court 
had in connection with proceedings on the qualifica- 



tion and disqualification of certain persons for grand 

jury service, expressed its opinion as follows : 

"The defendants should either have moved to 
quash the indictment or have pleaded in abate- 
ment, if they had no opportunity, or did not see 
fit, to challange the array. This, we think, is 
the true doctrine in cases where the objection does 
not go to the subversion of all the proceedings 
taken in impanelling and swearing the grand 
jury; but relates only to the qualification or dis- 
qualification of certain persons sworn upon the 
jury, or excluded therefrom; or to mere irregu- 
larities in constituting the panel. We have no 
inexorable statute making the whole proceedings 
void for any such irregularities." 

United States v. Gale, 109 U.S. 65, 67. 

And further on page 70, the court said: 

"These remarks apply with additional force 
where the objection is not to the disqualification 
of jurors who are actully sworn upon the panel, 
but to the exclusion or excuse of persons from 
serving on the panel. A disqualified juror placed 
upon the panel may be supposed injuriously to 
affect the whole panel; but if the individuals 
forming it are unobjectionable and have all the 
necessary qualifications, it is of less moment to 
the accused what persons may have been set aside 
or excused. The present case is of the latter kind. 
No complaint is made that any of the grand 
jurors who found the indictment were disquali- 
fied to serve, or were in any respect improper 
persons. It is only complained that the court 
excluded some persons for an improper cause, 
that is, because they labored under the disquali- 
fication created by the 820th Section of the Re- 
vised Statutes, which is alleged to be unconsti- 
tutional. It is not complained that the jury ac- 



tually impaneled was not a good one; but that 
other persons equally good had a right to be 
placed on it. These persons do not complain. If 
their right to serve on the grand jury was im- 
properly infringed, perhaps they might complain 
of being excluded. That is another matter. Or, 
perhaps, the defendants, if correct in their as- 
sumption that the law is unconstitutional, and 
that the court was governed by an improper rule 
in excluding persons under it, might have had 
the benefit of the error by moving to quash the 
indictment, or by pleading in abatement. But 
passing by these proper modes of taking the ob- 
jection, they waited until they had been tried 
and convicted on a plea of not guilty, and then 
moved in arrest of judgment. We think they 
were too late in raising the objection." 

Thereafter the matter of a qualified grand jury 
was tested in habeas corpus proceeding of Ex parte 
Wilson, 140 U.S. 575, and the Supreme Court in a 
decision dated May 25, 1891, in the language of head- 
note 3, held: 

"A deficiency in the number of grand jurors 
prescribed by law, there being present a num- 
ber sufficient to find an indictment, is a defect 
not going to the matter of jurisdiction, and one 
which cannot be taken advantage of after con- 
viction, by Writ of Habeas Corpus." 

Again in Kaizo v. Henry, 211 U.S. 146, decided 
November 16, 1908, proceedings upon habeas corpus 
petition alleging questionable citizenship of the grand 
jury, the court at page 149, said: 

"The indictment though voidable, if the objec- 



8 

tion is seasonably taken, as it was in this case, 
is not void." 

To the same effect is Harlan v. McGourin, 218 

U.S. 442, decided November 28, 1910, upon habeas 

corpus proceedings, raising objections to the organi- 
zation of the grand jury. 

See also United States ex rel McCann v. Thomp- 
son, 56 F. Supp. 661, affd 144 F. (2d), 604, 
cert, denied, 323 U.S. 790; and Title 18 U. S. 
C. A. Section 556a. 

The more recent decision in Ballard v. United 
States, 329 U.S. 187, a criminal cause, dismissing 
indictment found by grand jury drawn from a panel 
from which women were excluded, is not applicable 
to the instant case. Rather, the words of the dis- 
senting opinion of Justice Frankfurter on page 199 
are pertinent where he said: 

"Even now, this court does not find that the ex- 
clusion of women constitutes an inroad on the 
vital safeguards for a criminal trial so as to in- 
volve a denial of due process." 

Similar construction has been placed upon the 
effect of the Ballard case by the Circuit Court of Ap- 
peals for the Ninth Circuit in Redmon v. Squier, War- 
den, decided May 16, 1947, wherein the court held: 

"As far as the Ballard case, supra, is concerned, 
it is not authority for the proposition that a 
grand jury panel can be attacked by habeas cor- 
pus proceedings. The objection should be made 



seasonably, by motion to quash, or some similar 
motion." 



CONCLUSION 

For the foregoing reasons, it must be contended 
the decision below should be affirmed. 

Respectfully submitted, 

J. CHARLES DENNIS, 

United States Attorney 

GUY A. B. DOVELL, 

Assistant United States Attorney 

Attorneys for Appellee. 



No. 11680 

(United States 

Circuit Court of 

Jfor tfte JBtintf) Circuit 




WEBSTER-BRINKLEY COMPANY, 

a corporation, 

Appellant, 

vs. 
THOMAS R. BELFIELD, 

Appellee. 



®ran*cript of &ecorb 



Upon Appeal from the District Court of the United States 



u I * i 






for the Western District of Washington, 
Northern Division 

SEP 19 1947 

Rotary Colorprint, 870 Brannan Street, San Francisco 9-5-47 — 60 



No. 11680 

(Umtrb States 

Circuit Court of 

Jfor tfje iSmtf) Circuit 




WEBSTER-BRINKLEY COMPANY, 
a corporation, 

Appellant, 

vs. 

THOMAS R. BELFIELD, 

Appellee. 



transcript of Jkcorb 



Upon Appeal from the District Court of the United States 

for the Western District of Washington, 

Northern Division 



Rotary Colorprint, 870 Brannan Street, San Francisco 9-5-47—60 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record 
are printed literally in italic; and, likewise, cancelled matter appear- 
ing in the original certified record is printed and cancelled herein 
accordingly. When possible, an omission from the text is indicated by 
printing in italic the two words between which the omission seems to 
occur.] 

PAGE 

Answer 8 

Appeal: 

( lertificate of Clerk to Transcript of 
Record on 30 

Notice of 21 

Order Extending Time for Filing Record 
and Docketing 25 

Appointment and Notice and Consent to Sub- 
stitution of Attorneys 6 

Certificate of Clerk to Transcript of Record 
on Appeal 30 

Condensed Statement in Narrative Form (Ex- 
cept When Direct Quotations are Made) of 
Evidence at Trial December 18, 1946, Before 
Hon. John C. Bowen, District Judge 32 

Complaint 2 

Findings of Fact and Conclusions of Law .... 12 

Findings of Fact 13 

Conclusions of Law 14 

Judgment 16 

Motion for New Trial 18 



11 

IXDEX PAGE 

Names and Addresses of Attorneys 1 

Notice of Appeal 21 

Notice of Substitution of Attorneys 7 

Order Denying Motion for New Trial 23 

Order Extending Time for Filing Record and 

Docketing Appeal 25 

Order Transmitting Exhibits 28 

Statement of Points Upon Which Appellant 

Relies 26 

Statement of Points Upon Which Appellant 
Relies and Designation of Portion of the 

Record Necessary for Consideration Thereof 115 

Stipulation 29 

Stipulation and Order Eliminating Original 

Exhibits 118 

Supersedeas Bond 21 

Witnesses, Defendant : 

Belfield, Thomas R 70 

Gkregson, George 100 

McCarthy, Gerald S 85 

Thacker, Warren D 73 

Washington, Herbert R 64, 71 

Witnesses, Plaintiff: 

Belfield, Thomas R 32, 54, 107 

Burdge, Lloyd M 44 

Edmisten, Robert S 50 



NAMES AND ADDRESSES OF COUNSEL 

Attorneys for Appellant : 

MESSRS. CATLETT, HARTMAN, JARVIS 
& WILLIAMS, 

1410 Hoge Building, 
Seattle 4, Washington. 

Attorneys for Appellee : 

MESSRS. CHARLES H. HEIGHTON AND 
LEO W. STEWART, 

1021 Northern Life Tower, 
Seattle 1, Washington. 



2 W ebster-Brinlxley Co. vs. 

In the District Court of the United States for the 
Western District of Washington, Northern 
Division 

No. 1530 

THOMAS R. BELPIELD and 
JOHN G. POSTER, 

Plaintiffs, 

vs. 

WEBSTER-BRINKLEY CO., a corporation, 

Defendant. 

COMPLAINT 

The plaintiff, Thomas R. Belfield, for first cause 
of action, complains of the defendant and alleges: 

I. 

That he is a resident of King County, Wash- 
ington. 

II. 

That the defendant Webster-Brinkley Co. is a 
corporation organized and existing under the laws 
of the State of Washington with its principal place 
of business at Seattle, King County, Washington. 

III. 

During all the time herein mentioned this plaintiff 
was employed by the defendant as assistant chief 
inspector under the chief inspector; that the 
said defendant corporation was engaged in maki 
parts for the Maritime and Navy Service of the 
United States of America and for vessels con- 



Thomas B. Bdfield 3 

structed in connection with the service of the [Jnited 

States of America. That the United States statute 
provides that in this particular type of work that 
all time which the plaintiff worked over 40 hours a 
week shall be paid for at the rate of time and one- 
half for overtime. 

IV. 

That on or about November 20, 1944 and con- 
tinuing until and including' May 13, 1945, this plaint- 
iff was so employed by the defendant and during 
said period he worked 591 hours overtime for the 
defendant; that he has not been paid for the same, 
or [1*] any part thereof; that a copy of employment 
record therefor is hereto attached, marked Exhibit 
"A", and made a part of this complaint, which 
shows the amount of overtime put in on the respec- 
tive dates named: that plaintiff's pay per hour at 
rate of time and one-half would be $3.68 per hour; 
that the defendant is indebted to plaintiff in the sum 
of $2174.88 by reason of the matters herein stated. 
That he has made demand for the same and has 
been refused payment. 

V. 

That the obligation of the defendant arises under 
the statutes of the United States of America. 

VI. 

That under the Federal Statute plaintiff is en- 
titled to double the amount of wages earned and 
unpaid, or a total of $4349.76. 



* Pase numbering appeanr.^ at foot of -ase of original certified 
Transcript of Record. 



4 Webster-Brinliley Co. vs. 

VII. 

That $1500.00 is a reasonable sum to be allowed 
this plaintiff as attorney's fees herein. 

* * * (Second Cause of Action omitted on re- 

quest.) — Clerk. 
WHEREFORE, the plaintiff Thomas R. Belfield 
prays that he have judgment against the defendant 
in the sum of $4349.76, together with attorney's fees 
in the sum of $1500.00, or such other sum as the 
court may allow, and for his costs and disbursements 
herein. 

* * * (Prayer on second cause of action omit- 

ted on request.) — Clerk. 

GEORGE P. HANNAN 
Attorney for Plaintiffs, 
1021 Northern Life Tower, 
Seattle, Washington. 
State of Washington 
County of King — ss. 

Thomas R. Belfield, being first duly sworn on 
oath deposes and says: That he is a plaintiff above 
named; that he has read the foregoing complaint, 
knows the contents thereof and that the same is true 
as he verily believes. 

/s/ THOMAS R. BELFIELD. 
Subscribed and sworn before me this 17th day of 
April, 1946. 

[Seal] GEORGE F. HANNAN, 
Notary Public in and for the State of Washing- 
ton, residing at Seattle. 

(Note — Affidavit of John Poster and Exhibit 
"B" omitted on request.) — Clerk. 
[Endorsed] : Filed April 19, 1946. 



Tin nuns B. Bel-field 5 

EXHIBIT "A" 

Overtime covering period November 20, 1944 to 
May 13, 1945: 





Number 






Number 






Number 




Hours Over- 






Hours Over- 






Hours Over- 


Date 


time Worked 


Date 


time Worked 


Date 


t 


iin. Worked 


L944 




1944 






1945 






CTov. 20 


2.5 


Dec. 


29 


2.5 


Feb. 


6 


2.0 


" 21 


2.0 


> > 


30 


8.0 




7 


6.0 


" 22 


3.0 


1945 








8 


2.0 


" 23 


3.5 


Jan. 


2 


2.0 




9 


1.0 


" 25 


8.0 




3 


1.5 




10 


8.0 


" 26 


7.0 




4 


2.0 




12 


2.0 


m 27 


4.0 




5 


2.0 




13 


2.0 


" 28 


2.0 




6 


8.0 




14 


2.0 


" 29 


2.0 




7 


9.0 




15 


4.0 


" 30 


1.0 




8 


3.0 




16 


8.0 


Dec. 1 


4.5 




9 


3.0 




17 


7.0 


" 2 


8.0 




10 


2.0 




18 


3.0 


" 4 


3.0 




11 


3.0 




19 


3.0 


" 5 


4.5 




12 


5.0 




20 


5.0 


" 6 


4.5 




13 


8.0 




21 


2.0 


" 7 


3.0 




15 


3.0 




22 


1.0 


" 8 


2.5 




16 


2.0 




23 


8.0 


" 9 


8.0 




17 


2.0 




24 


3.0 


" 10 


6.0 




18 


5.0 




26 


2.0 


" 11 


3.0 




19 


4.0 




27 


2.0 


" 12 


7.0 




20 


8.0 




28 


2.0 


" 13 


4.0 




22 


3.0 


Mar. 


1 


2.0 


" 14 


3.5 




23 


3.0 




2 


3.0 


" 15 


6.5 




24 


2.0 




3 


8.0 


" 16 


8.0 




25 


1.0 




4 


6.0 


" 17 


6.0 




26 


5.0 




5 


2.0 


" 18 


1.0 




27 


8.0 




6 


2.5 


" 19 


4.0 




28 


7.0 




7 


3.0 


" 20 


4.0 




29 


4.0 




8 


2.0 


" 21 


3.0 




30 


2.0 




9 


1.0 


" 22 


5.0 




31 


1.0 




10 


8.0 


" 23 


8.0 


Feb. 


1 


3.0 




12 


2.0 


" 26 


2.5 




2 


1.0 




13 


1.5 


" 27 


2.0 




3 


s.o 




14 


1.0 


" 28 


2.0 




5 


2.0 




15 


3.0 



Webster-Brinkley Co. vs. 







EXHIBIT 




V" (Continued) 








Number 






Number 






Number 






Hours Over- 






Hours Over- 






Hours Over- 


Date 


time Worked 


Date 


time Worked 


Date 


time "Worked 


1045 






1945 






1945 






Mar. 


16 


2.0 


Apr. 


c 


6.0 


Apr. 


25 


7.0 


y ) 


17 


8.0 


y y 


6 


2.0 


y y 


26 


3.0 


y y 


18 


6.0 


t - 


7 




y y 


27 


1.0 


y y 


19 


1.0 


y y 


8 


8.0 


y y 


28 


8.0 


y y 


20 


3.0 


' ' 


9 


2.0 


y y 


29 


6.0 


) ' 


21 


5.0 


y y 


10 


3.0 




30 


2.0 


' i 


22 


1.0 




11 


3.0 


May 


1 


2.0 


y y 


23 


2.0 


t ' 


12 


2.0 






_ 


1.0 


y y 


24 


8.0 


y y 


13 


3.0 


y y 


3 


1.5 


y y 
y y 


26 
27 


3.0 
5.0 


y y 


14 
16 


8.0 
1.0 




4 

5 


2.0 

8.0 








y y 


17 


1.0 


y y 


I 


1.0 


• » 


28 


3.0 




















y y 


18 


3.0 


y y 


8 


2.0 


y y 


29 


2.0 


y y 


19 


2.0 


y y 


9 


2.0 


y y 


30 


1.0 


y y 


20 


2.0 




10 


1.0 


y y 


31 


8.0 


y y 


21 


8.0 


y y 


11 


3.0 


Apr. 


2 


3.0 


y y 


22 


6.0 


y y 


12 


1.0 


t » 


3 


2.0 


y y 


23 


3.0 








» > 


4 


3.0 


y y 


24 


2.0 


To 


tal ! 


591 hours 



[Title of District Court and Cause.] 

APPOINTMENT AND NOTICE AND CON- 
SENT TO SUBSTITUTION OF ATTORNEYS 

To the Honorable John C. Bowen, Judge of above 
entitled Court, and to the above named defendant 
and to Catlett, Hart man, Jarvis & Williams, Attor- 
neys for Defendant. 

You and each of you will please take notice that 
the undersigned plaintiffs have retained and ap- 
pointed Charles H. Heighton and Leo W. Stewart 
to represent them in the above entitled action, and 
consent to the substitution of such attorneys for 



Thomas B. Bdfield 7 

< in man, atl record for plaintiffs 

herein, who has passed away. 

Dated this 29th day of May, 1946. 

THOMAS R. BELFIELD, 
JOHN G. FOSTER, 

Plaintiffs. 

[Endorsed]. Filed July 2, 1946. 



[Title of District Court and Cause.] 

NOTICE OF SUBSTITUTION 
OF ATTORNEYS 

To the Defendants above named, and to Catlett, 
Hartman, Jarvis & Williams, your attorneys: 

You, and each of you, will please taken notice that 
the undersigned attorneys, Charles H. Heighton and 
Leo W. Stewart, enter this appearance for and on 
behalf of the plaintiffs Thomas R. Belfield and John 
G. Foster, and that hereafter all motions and plead- 
ings be served upon them at their office, 1021 North- 
ern Life Tower, Seattle, Washington. 

Dated this 27th day of June, 1946. 

CHARLES H. HEIGHTON, 
LEO W. STEWART, 

Attorneys for Plaintiffs. 

Copy received: Catlett, Hartman, Jarvis & Wil- 
liams, July 1, 1946. 

[Endorsed] : Filed July 2, 1946. [6] 



S W ebster-Brinh'l e u Co. vs. 

[Title of District Court and Cause.] 

ANSWER 

Now comes the defendant in the above entitled 
action and in answer to the complaint of the plaintiff 
Thomas R. Belfield alleges as follows: 

I. 

Admits the allegations of Paragraphs I and II. 

II. 

As to the allegation of Paragraph III, it admits 
that on November 16, 1944, plaintiff Thomas R. Bel- 
field was in the employ of the defendant as Assistant 
Chief Inspector ; that it was engaged during certain 
periods of time in manufacturing steering devices 
and parts for the Maritime Commission and United 
States Navy as prime contractor and subcontractor ; 
it denies each and every other allegation in said 
paragraph. 

III. 

As to the allegations of Paragraph IV, it admits 
that the plaintiff Thomas R. Belfield was employed 
by it as Assistant Chief Inspector on November 16, 
1944 and continued in its employ until the 15th day 
of May, 1945, at a salary of $425.00 per month; it 
denies each and every other allegation in said para- 
graph. 



Thomas R. Belfield 9 

IV. 

As to the allegations of Paragraphs V, VI, and 
VII, defendant denies each and every one. 

For a separate and affirmative defense to the com- 
plaint of Thomas R. Belfield, it alleges as follows: 

I. 

That in August of 1944, the Webster-Brinkley 
Company commenced the reorganization and en- 
largement of its Inspection Department, and on 
October 9, 1944, it filed an application to establish 
the proper salary for the position of Chief Inspector 
and Assistant Chief Inspector with the Salary Sta- 
bilization Unit of the Bureau of Internal Revenue 
which, under presidential order governing the ad- 
ministration of wage stabilization regulations, had 
jurisdiction over salaried employees occupying [7a] 
executive, administrative or professional positions 
and receiving salaries of more than $200.00 a month ; 
that after investigation and in November, 1944, the 
Salary Stabilization Unit approved the application 
to fix the salary of the plaintiff Thomas R. Belfield 
in the position of Assistant Chief Inspector at 
$425.00 a month, and on November 16, the plaintiff 
Thomas R. Belfield entered upon his employment as 
Assistant Chief Inspector at the salary fixed; that 
the position of Assistant Chief Inspector was a 
supervisory position and classifiable as an executive 



10 Webster-Bririkley Co. vs. 

or administrative position under the regulations of 
the Administrator of the Wage and Hour Division 
of the Department of Labor issued pursuant to Sec. 
13(a) of the Fair Labor Standards Act, being the 
act of June 25, 1938, 29 U. S. Code, Sees. 201-219, 
and that plaintiff Thomas R. Belfield was therefore 
exempt from the provisions of Sees. 6 and 7 of said 
Act; that his employment was on a monthly basis 
and without overtime. 

For a second separate answer and affirmative 
defense to the complaint of Thomas R. Belfield, 
defendant alleges: 

I. 

It repeats the allegations of Paragraph I of the 
first affirmative defense; it alleges further that the 
plaintiff Thomas R. Belfield fully understood that in 
the position of Assistant Chief Inspector, he was act- 
ing in an executive or administrative capacity and 
would not be entitled to overtime ; that he was fully 
informed of the application to the Stabilization Unit 
and its action thereon, and that he accepted the em- 
ployment with the understanding that he would not 
be paid for overtime, and continued in such employ- 
ment from the 16th day of November, 1944, to May, 
1945; that he received checks semi-monthly in pay- 
ment for his services at the rate set forth during 
the whole period [8] of his employment in such 
position; that during that period, he never suggested 
or claimed that he was entitled to any overtime; he 



Thomas R. Belfield 11 

never asserted or claimed that his position was a 
non-exempt position; that because of the bona fide 
belief of the defendant company that the position of 
Assistant Chief Inspector was an exempt position, 
and by reason of the fact that plaintiff never at any 
time made any claim to overtime or any objection 
to the checks received, defendant kept no record of 
the hours worked by Mr. Belfield, as it did not of its 
other executive and administrative employees; that 
by reason of the foregoing facts, the defendant 
Thomas R. Belfield is now estopped to claim that he 
occupied a non-exempt position or to claim any over- 
time in connection therewith. [9] 

Wherefore the defendant prays that the above 
complaint be dismissed and that it have judgment 
against the plaintiffs for its costs and disbursements 
herein. 

CATLETT, HARTMAN, 

JARVIS & WILLIAMS, 

Attorneys for Defendant. 

State of Washington, 
County of King — ss. 

Harold H. Hartman, being first duly sworn, on 
oath disposes and says: 

That he is Vice President of the Webster-Brink- 
ley Company, a corporation; that he makes this 
verification on its behalf; that he has read the fore- 



12 Webster-Brinkley Co. vs. 

going answer, knows the contents thereof, and be- 
lieves the same to be true. 

/s/ HAROLD H. HARTMAN, 

Subscribed and sworn before me this 17th day of 
July, 1946. 

[Seal] /s/ MIMA P. BENSON, 

Notary Public in and for the State of Washing- 
ton, residing in Seattle. 

July 18, 1946, Leo W. Stewart, Attorney for 
Plaintiff. 

[Endorsed] : Piled July 22, 1946. 



[Title of District Court and Cause.] 

FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

This cause came on regularly to be tried before the 
Court, sitting without a jury, on December 18, 1946, 
at 11:00 o'clock a. m., the plaintiffs being present 
in person and being represented by their attorneys, 
Leo W. Stewart and Charles H. Heighton, and the 
defendant being represented by its attorney, Fred 
W. Catlett, of the firm of Catlett, Hartman, Jarvis 
& Williams; witnesses having been sworn and testi- 



Thomas R. Bel field 13 

fled, documentary evidence having been adduced on 
behalf of the plaintiffs and defendant, and the trial 
having been held on the merits, the Court makes the 
following 



Finding of Fact 



I. 

That the plaintiffs Thomas R. Belfield and John 
Gr. Foster brought the above entitled action to re- 
cover from the defendant overtime compensation 
and additional equal amount as liquidated damages 
pursuant to Sec. 16(b) of the United States Fair 
Labor Standards Act of 1938, hereinafter referred 
to as the Act; that jurisdiction is conferred upon 
the court by Section 14 (8) 28 United States Code. 

That the defendant Webster-Brinkley Company 
is a corporation organized and existing under the 
laws of the State of Washington, with its principal 
place of business at Seattle, King County, Wash- 
ington. 

II. 

During all the times mentioned in the complaint 
on file [12] herein defendant was engaged in making 
of various parts for the Maritime and Naval Service 
of the United States of America, and for vessels 
constructed in connection with the service of the 
United States Maritime service ; during all the times 
mentioned the said defendant was engaged in inter- 
state commerce. 



14 Webster-Brinkley Co. vs. 

III. 

That during said period from November 20, 1944 
to May 13, 1945, plaintiff Thomas R, Belfield worked 
for the defendant as assistant chief inspector a total 
of 591 overtime hours for which said plaintiff has 
not been compensated, and that under the Act the 
said Thomas R. Belfield was entitled to one and one- 
half times his compensation for said overtime, and 
the rate of pay for the said Thomas R. Belfield for 
overtime purposes is the sum of $3,678 per hour for 
said 591 overtime hours worked by said Thomas R. 
Belfield or the sum of $2173.70, together with an ad- 
ditional equal amount as liquidated damages. 

The Court further finds that the said Thomas R. 
Belfield was during his employment as aforesaid 
engaged in interstate commerce and in the produc- 
tion of goods for interstate commerce. 

Done in open court this 4th day of January, 1947. 

/s/ JOHN C. BOWEN, 
Judge. 

From the foregoing Findings of Fact, the Court 
finds the following: 

Conclusions of Law 

I. 

That this court has jurisdiction over the causes of 
action set forth in plaintiff's complaint and the 
parties to the action. 



Thomas R. Belfield 15 

II. 

That upon the first cause of action in favor of the 
plaintiff Thomas R. Belfield, lie is entitled to judg- 
ment in his favor and [13] against the defendant in 
the sum of $4347.40, together with attorneys' fees 
in the sum of $500, and costs of suit. 

Done in open court, this 4th day of January, 1947. 
/s/ JOHN C. BOWEN, 
Judge. 

Presented by: Charles H. Heighton and Leo W. 
Stewart, Attorneys for Plaintiffs. 

[Endorsed]. Filed January 4, 1947. 



16 Webster-Brinkley Co. vs. 

In the District Court of the United States for 
the Western District of Washington, Northern 
Division 

No. 1530 

THOMAS P. BELFIELD and 
JOHN G. FOSTER, 



Plaintiffs, 



vs. 



WEBSTER-BRINKLEY COMPANY, 
a corporation, 

Defendant. 

JUDGMENT 

This cause came on regularly to be tried before 
the undersigned Judge of the above entitled Court, 
sitting without a jury, on December 18, 1946, to 
and including December 21, 1946, the plaintiffs 
being present in person and represented by their 
attorneys, Leo W. Stewart and Charles H. Heigh- 
ton; the defendant being represented by its 
attorney, Fred W. Catlett. of the firm of Catlett, 
Hartman, Jarvis & Williams, and opening state- 
ment on behalf of plaintiffs and the defendant 
having been made by respective counsel, and evi- 
dence on behalf of both of the parties, plaintiff 
and defendant, having been introduced, and closing 
arguments of respective counsel having been 
heard; 

And the Court having entered herein its Find- 
ings <>r Fact and Conclusions of Law, in conformity 



Thomas E. Bel field 17 

with which the following judgments are hereby 

rendered: 

It Is Hereby Ordered, Adjudged and Decreed, 
that the plaintiff Thomas R. Belfield do have and 
recover judgment against the defendant Wei 
Brinkley Company, a corporation, on the first 
cause of action set forth in plaintiffs' complaint 
in the sum of $4347.40, together with attorneys' 
fees in the sum of $500.00 and the costs of suit 
herein to be taxed. 

It Is Further Ordered, Adjudged and Decreed, 
that the second cause of action in favor of plaintiff 
John G. Foster, be and the same is hereby dis- 
missed with prejudice, [15] and that the defendant 
have judgment against the said plaintiff for its 
costs and disbursements herein to be taxed. 

Done in open Court this 4th day of January, 
1947. 

JOHN C. BOWEN, 



Judge. 



Presented by 



LEO W. STEWART, 
CHARLES H. HEIGHTON, 

Of Attorneys for Plaintiffs. 

Approved: as to judgment against John G. 
Foster. 

FRED W. CATLETT, 

Attorneys for Defendant. 

[Endorsed]: Filed January 4, 1947. [16] 



18 Webster-Brinkley Co. vs. 

[Title of District Court and Cause.] 

MOTION FOR NEW TRIAL 

Now ( lomes the defendant in the above entitled 
cause and moves the court to set aside the findings 
of fact and conclusions of law and judgment so 
far as they affect the plaintiff, Thomas R. Belfield, 
entered herein on the 4th day of January, 1947, 
and to grant defendant a new trial so far as the 
plaintiff, Thomas R. Belfield is concerned, for the 
following; grounds materiallv affecting substantial 
rights of the defendant : 

1. Insufficiency of the evidence to justify the 

decision of the court. 

2. Error in law occurring at the trial. 

I. 

The evidence was insufficient to justify the court 
in cone] using that Thomas R. Belfield was not 
employed in an executive and administrative capac- 
ity and was not exempt from the Federal Fair 
Labor Standards Act but was subject to said Act 
and entitled to overtime under it. 

II. 

The evidence was also insufficient to justify the 
court in finding that Thomas R. Belfield was em- 
ployed at $425.00 a month upon the basis of 40 
hours of work per week, and is insufficient to 
justify any finding by the court that the basis of 
employment was other than $425.00 a month for 



Thomas R. Bel field 19 

such number of hours per week as the 
take or as he might work; in other words, that [17] 
the emplyoment was for no definite, but for a 
fluctuating, number of hours per week. 

III. 

The evidence was also insufficient to justify the 
court in finding that Thomas R. Belfield actually 
worked 591 overtime hours or any number of over- 
time hours. 

IV. 

The evidence was insufficient to justify the court 
in adopting the formula it adopted to calculate the 
overtime due Thomas R. Belfield, if any, and the 
award to Thomas R. Belfield of the sum of 

$2,174.88. 

V. 

The evidence was also insufficient to justify the 
court in allowing to Thomas R. Belfield an addi- 
tional equal amount of $2,174.88 as liquidated 
damages. 

The errors in law occurring at the trial, among 
others, were as follows: 

I. 

The finding by the court that Thomas R. Belfield, 
in his employment by the defendant as assistant 
chief inspector, was not an executive or adminis- 
trative employee and therefore exempt from the 
Federal Fair Labor Standards Act, and the finding 
by the court that he came under the operation of 
said Act and was therefore entitled to overtime. 



20 Webster-Brinldey Co. vs. 

The court also erred in finding that the said Thomas 
R. Belfield was employed on a basis of a 40-hour 
week or on any other basis than for an indefinite 
and shifting number of hours per week, and the 
court therefore erred in finding that, under the 
Act, Thomas R. Belfield was entitled to V/2 times 
his compensation for said overtime, if any over- 
time at all were worked, and the court also erred 
in finding that the amount due [18] said Thomas 
R. Belfield, if he worked any such overtime, was 
the sum of $2,174.88, and also in allowing to Thomas 
R. Belfield an additional equal amount as liquidated 
damages. The court erred in making and entering 
its findings of fact in favor of Thomas R. Belfield 
and specially in respect to the matters just speci- 
fied, and the court further erred in entering its 
conclusions of law No. II and in entering that 
portion of its judgment contained in the first para- 
graph thereof, granting to Thomas R. Belfield a 
judgment against the defendant, Webster-Brinkley 
Co., in the sum of $4,349.76, together with attorney's 
fees in the sum of $500.00 and the costs of suit 
herein to be taxed. 

CATLETT, HARTMAN, 
JARVIS & WILLIAMS, 

Attorneys for Defendant. 

Copy received Jan. 10, 1947. 

LEO W. STEWART, 
CHAS. H. HEIGHTON, 

Attys. for Plaintiff. 

[Endorsed]: Piled Jan. 10. 1947. [19] 



Thomas R. Belfield 2\ 

[Title of District Court and Cause.] 

NOTICE OP APPEAL 

Notice Is Hereby Given that the defendant, 

Webster-Brin kley Co., a corporation, hereby ap- 
peals to the Circuit Court of Appeals for the Ninth 
Circuit from that portion of the final judgment in 
the above entitled ease affecting the plaintiff 
Thomas R. Belfield, and awarding him judgment 
against the defendant company in the sum of 
$4,347.40, together with attorneys' fees in the sum 
of $500.00 and the costs of suit, said judgment 
having been entered in this action on the 6th day 
of January, 1947. 

CATLETT, HARTMAN, 
JARVIS & WILLIAMS, 
Attorneys for appellant, 
Webster-Brinkley Co. 

[Endorsed] : Filed March 11, 1947. [20] 



[Title of District Court and Cause.] 

SUPERSEDEAS BOND 

Know All Men By These Presents, That we, 
Webster-Brinkley Company, a corporation, as prin- 
cipal, and Hartford Accident & Indemnity Co. as 
surety, are held and firmly bound unto Thomas 
R. Belfield in the full and just sum of $5,000.00, 
to be paid to the said Thomas R. Belfield. his execu- 
tors, administrators or assigns; to which payment, 



22 Webster-Brinkley Co. vs. 

well and truly to be made, we bind ourselves and 
our successors, jointly and severally, by these 
presents. 

Sealed with our seals and dated this 11th day of 
March in the year of our Lord One Thousand Xine 
Hundred and Forty-seven. 

Whereas, lately at a District Court of the United 
States for the Western District of Washington, 
Northern Division, in a suit depending in said court 
between Thomas E. Belfield, plaintiff, and Webster- 
Brinkley ( iompany, a corporation, defendant, a 
judgment was rendered against the said defendant 
and the said Webster-Brinkley Company having 
filed in said court a notice of appeal to reverse the 
judgment in the aforesaid suit, so far as it affects 
the plaintiff Thomas R. Belfield and awards a judg- 
ment to him against the defendant, Webster-Brink- 
ley Company, on appeal to the United States Circuit 
Court of Appeals for the Ninth Circuit, at a session 
of said Circuit Court of Appeals to be holden in 
San Francisco in the State of California. 

Now, the condition of the above obligation is 
su<-h, That if the said Webster-Brinkley Company, 
a c ration, shall prosecute [21] its appeal to 
effect, and satisfy the judgment in full, together 
with costs, interest and damages for delay, if for 
any reason the appeal is dismissed or if the judg- 
ment is affin u d, and to satisfy in full such modifi- 
cation of the judgment and such costs, interest and 
the appellate court may adjudge and 
award, if the defendant fail to make its plea good, 



Thomas R. Bel field 23 

then the above ol tion to be void ; i tain 

in full force and virtue. 

[Seal] WEBSTER-BKINKLEY 

COMPANY, 

By H. R. WASHINGTON, 
Asst. Treas. 

[Seal] HARTFORD ACCIDENT & 

INDEMNITY CO., 

Surety. 

By GERALD L. PERRY, 

Attorney-in-Fact. 

Presented bv: 

FRED W. CATLETT, 

Attorney for Defendant. 

Approved as to form and amount: 

LEO W. STEWART, 
CHARLES H. HEIGHTON, 

Attorneys for Plaintiff. 

Approved, 3/11/1947. 

LLOYD L. BLACK, 

L T . S. District Judge. 

[Endorsed] : Filed March 11, 1947. 



[Title of District Court and Cause.] 

ORDER DENYING MOTION FOR NEW TRIx\L 

This matter coming on regularly for bearing on 
March 3, 1947, on motion of the defendant for a new 



24 Webster-BrinMey Co. vs. 

trial as to the cause of action of the plaintiff Thomas 
R. Belfield, the defendant being represented by its 
attorney, Fred W. Catlett of the firm of Catlett, 
Hartman, Jarvis cV: Williams, and the plaintiff, 
Thomas R. Belfield being represented by his attor- 
neys, Leo W. Stewart and Charles H. Heighton, and 
the Court having listened to the argument of coun- 
sel, and being fully advised in the premises, 

It Is Hereby Ordered that defendant's motion 
for a new trial as to the cause of action of the plain- 
tiff Thomas R. Belfield be and the same is hereby 
denied. 

The defendant excepts to the entry of this order 
and its exception is allowed. 

Dated this 14th day of March, 1947. 

JOHN C. BOWEN, 
Judge. 

Presented by: 

CHARLES H. HEIGHTON, 
Of Counsel for Plaintiff. 
Thomas R. Belfield. 

Approved as to form : 

FRED W. CATLETT, 
CATLETT, HARTMAN, 
JARVIS & WILLIAMS, 

Attorneys for Defendant. 

[Endorsed]: Filed March 14. 1947. [23] 



Thomas E. Belfield 25 

[Title of District Court and Cause.] 

ORDER EXTENDING TIME FOR FILING 
RECORD AND DOCKETING APPEAL 

It appearing to the Court that notice of appeal 
was duly and regularly filed in the above-entitled 
cause and the transcript of the testimony immedi- 
ately ordered but that it has been impossible for the 
clerk to complete the preparation of the record on 
appeal herein for the reason that the court reporter 
has not been able to complete the transcript of the 
testimony and that it is necessarv that the time be 
extended within which the record on appeal may 
be filed and the appeal docketed in said Circuit 
Court of Appeals, the court being fully advised in 
the premises, 

It Is Hereby Ordered that the time within which 
the record on appeal may be filed and the appeal 
docketed in said Circuit Court of Appeals be and 
it is hereby extended for a period of ninety days, 
or until and including the 9th day of June, 1947. 

Done In Open Court this 17th day of April, 1947. 

JOHN C. BOWEN, 
Judge. 
The above order is consented to and approved. 

LEO W. STEWART,, 
CHARLES H. HEIGHTON, 

Attorneys for Plaintiff and 
Respondent. 



26 Webster-Brinldcij Co. vs. 

Order presented by: 

FRED W. CATLETT, 

Attorney for Defendant and 
Appellant. 

[Endorsed] : Filed April 17, 1947. [24] 



[Title of District Court and Cause.] 

STATEMENT OF POINTS UPON WHICH 
APPELLANT RELIES 

Appellant, Webster-Brinkley Co., relies on this 
appeal upon the following points, to-wit: 

1. The evidence was insufficient to justify the 
court in con-eluding that Thomas R. Belfield was 
not employed and worked for the Webster-Brinkley 
Co. in an executive or adminis lity and 
was not exempt from the Federal Fair Labor Stand- 
ards Act but was subject to said act and entitled to 
overtime under it. 

2. The evidence was also insufficient to justify 
the court in finding that Thomas R. Belfield was 
employed at $425.00 a month upon the basis of forty 
hours of work per week and it was insufficient to 
justify any finding by the court that the basis of 
employment was other than $425.00 a month for 
such number of hours per Week as the job might 
take or as he might work; in other words, that the 
employment was for no definite but for a fluctuat- 
ing number of hours per week. 



Thomas E. Belfield 27 

3. The evidence was also insufficient to justify 
the court in finding that Thomas R. Belfield 
actually worked 593 overtime hours or any number 
of overtime hours. 

4. The evidence was insufficient to justify the 
court in adopting the formula it adopted to calcu- 
late the overtime due Thomas R. Belfield, if any, 
and the award to Thomas R. Belfield of the sum 
of $2174.88. 

5. The evidence was also insufficient to justify 
the court in allowing to Thomas R. Belfield an addi- 
tional equal amount of [25] $2174.88 as liquidated 
damages. 

6. The court erred in making and entering its 
findings of fact No. Ill and IV, its conclusion of 
law No. II and its judgment against the defendant 
in the sum of $4349.76 together with attorneys' fees 
in the sum of $500.00 and the costs of suit. 

Dated this 19th day of May, 1947. 

CATLETT, HARTMAN, 

JARVIS & WILLIAMS, 
FRED W. CATTLETT, 

Attorneys for Webster-Brink- 
ley Co., Appellant. 

Copy received May 19, 1947. 

LEO W. STEWART & 
CHARLES H. HEIGHTON, 

By CHARLES H. HEIGHTON. 

[Endorsed] : Filed May 24, 1947. [26] 



28 Webster-Brinlxley Co. vs. 

[Title of District Court and Cause.] 

ORDER 

It appearing to the Court that an appeal has been 
duly and regularly taken in the above-entitled case 
so far as Thomas R. Belfield is concerned and that 
the record on appeal is being prepared by the clerk 
of this court for transmission to the Circuit Court 
of Appeals of the Ninth Circuit and that the origi- 
nal exhibits are a necessary part of a proper record 
on appeal, the clerk of the above-entitled court is 
hereby 

Ordered and Directed to transmit to the Circuit 
Court of Appeals of the Ninth Circuit as part of 
the record in the cause the original exhibits con- 
nected with the case of Thomas R. Belfield, to-wit: 
Plaintiff's Exhibits 1, 3 and 6, and Defendant's 
Exhibits A-l, A-3, A-8, A-9, A-10 and A-ll. 

Dated this 23rd day of June, 1947. 

JOHN C. BOWEN, 
Judge. 

Approved : 

CHARLES H. HEIGHTON & 
LEO W. STEWART. 

FRED W. CATLETT, 

Attorneys for Plaintiff, 
Thomas R. Belfield. 

[Endorsed] : Piled June 24, 1947. [27] 



Thomas R. Bel field 29 

[Title of Distrii I Cause.] 

STIPULATION 

It Is Hereby Stipulated by and between Thomas 
R. Belfield, plaintiff and appellee, by his attorneys, 
Leo W. Stewart and Charles H. Heighton, and 
Webster-Brinkley Co., defendant and appellant, by 
its attorneys, Catlett, Hartman, Jarvis & Williams 
and Fred W. Catlett, as follows: 

That the following parts of the record of the 
above ease shall be included in the record on appeal : 

1. The first cause of action of complaint (that 
relating to Thomas R. Belfield), first part of prayer, 
first part of verification, and Exhibit A. 

2. Appointment and consent to substitution of 
attorney (June 27, 1946, Pile No. 7). 

3. Answer, first part (that relating to Thomas 
R. Belfield), prayer. 

4. Findings of Fact and Conclusions of Law 
(Belfield, File No. 18). 

5. Judgment (File No. 19). 

6. Defendant's motion for new trial (File 

No. 20). 

7. Notice of Appeal (File No. 23). 

8. Supersedeas bond (File No. 24). 

9. Order denying motion for new trial (File 
No. 25). 



30 Webster-Brinkley Co. vs. 

10 - ' ' Lpt of the oral testi- 

mony ; condensed st: nt in narrative form of 

such testin be [28] filed herein by appellant 

and, if the appellee be dissatisfied with that narra- 
tive statement, the testimony in question and answer 
form to be substituted for all or a part of said con- 
densed statement. 

11. Order extending time for filing record and 
docketing appeal. 

Dated this 19th day of May, 1947. 

THOMAS R. BELFIELD. 
Bv LEO W. STEWART, 

» 7 

CHARLES H. HEIGHTON, 

His Attorneys. 

WEBSTER-BRIXKLEY CO., 
By CATLETT. HARTMAN, 

JAR VIS & WILLIAMS, 
FRED W. CATLETT, 
Its Attorneys. 

[Endorsed] : Filed May 24, 1947. [29] 



[Title of District Court and Cause.] 

CERTIFICATE OF CLERK TO TRANSCRIPT 
OF RECORD ON APPEAL 

United States of America, 
Western District of Washington — ss. 

I, Millard P. Thomas, Clerk of the United States 
District Court for the Western District of Wash- 



Thomas R. Belfield 31 

ington, do hereby certify that the foregoing type- 
written li-ans-ciipt of record, consisting of pages 
numbered from 1 to 29, inclusive, is a full, true and 
complete copy of so much of the record, papers and 
other proceedings in the above-entitled cause as is 
required by stipulation of counsel filed and shown 
herein, as the same remain of record and on file in 
the office of the Clerk of said District Court at 
Seattle, and that the foregoing, together with the 
<•< ndensed statement in narrative form of evidence 
at the trial December 18, 1946, before Honorable 
John C. Bowen, United States District Judge, 
transmitted as part hereof, constitute the record on 
appeal herein from the judgment of said United 
States District Court for the Western District of 
Washington to the United States Circuit Court of 
Appeals for the Ninth Circuit. 

I further certify that the following is a true and 
correct statement of all expenses, costs, fees and 
charges incurred in my office by or on behalf of the 
appellant for preparing the record on appeal to 
the United States Circuit Court of Appeals for the 
Ninth Circuit, to-wit : [30] 

6 pages at 40c $2.40 

25 pages at 10c (copies furnished) $2.50 

Appeal Fee $5.00 

Total $9.90 

I hereby certify that the above amount has been 
paid to me by the attorneys for the appellant. 



32 Webster-Brinkley Co. vs. 

In Witness Whereof I have hereunto set my hand 
and affixed the official seal of said District Court at 
Seattle, in said District, this 2nd day of July, 1947. 

[Seal] MILLARD P. THOMAS, 

Clerk. 

By TRUMAN EGGEB, 

Chief Deputy. [31] 



[Title of District Court and Cause.] 

CONDENSED STATEMENT IN NARRATIVE 
FORM (EXCEPT WHEN DIRECT QUO- 
TATIONS ARE MADE) OF EVIDENCE 
AT TRIAL DECEMBER 18, 1946, BEFORE 
HON. JOHN C. BOWEN, DISTRICT 
JUDGE 

Charles H. Heighton and Leo W. Stewart Appear- 
ing for the Plaintiffs; Fred W. Catlett of 
Catlett, Hartman, Jarvis & Williams Appear- 
ing for the Defendant 

By agreement, check stubs marked Plaintiff's 
Exhibit 1, and Defendant's Exhibits A-2 and A-3 
were admitted in evidence. 

Thomas R. Belfield, called as a witness by the 
plaintiff, having been first duly sworn, testified as 
follows: My name is Thomas R. Belfield, my 
address W. 3501 Pacific, Spokane, Washington. 
I am the plaintiff, and the defendant, Webster- 
Brinkley Co., is a corporation. My life's occupa- 



Thomas B. Bdfield 33 

tion is the machinery business, my trade is ma- 
chinist's. I have acquired all the knowle lg< and 
skill for a rating in that department. I am known 
in the trade as a journeyman machinist and was 

such before the late war for about 14 years. I am 
married and have a family now living in Spokane. 
At the time the action was commenced, I was a 
resident of Seattle. I started to w T ork for Webster- 
Brinkley Co. sometime in January, 1943. I was 
hired for shop inspector. My duties w T ere to inspect 
machine parts and castings in the shop before 
parts went out for assembly. The Webster-Brinkley 
Co. was at that time, and particularly in November, 
1944, and May, 1945, engaged in the manufacture 
of deck machinery for the Maritime and Navy. It 
was sent to different shipyards in all parts of the 
country. I worked directly upon those machines. 
During the overtime period, my work was mostly 
on the cargo winches. I also did inspecting work 
on anchor windlasses, planetary capstans and 
hydraulic steerers. I went to work in 1943 as an 
inspector. At that time, I think there were five other 
inspectors who did the same work as I. The execu- 
tive officer in charge was Bill Lewis, Chief In- 
spector. I did no work outside the plant at that 
time as assembly inspector. Later on, I was trans- 
ferred to the outside as outside inspector. An 
assembly inspector watches these different machines 
being assembled and sees that they are assembled 
right and that they work free. The plant was lo- 
cated in Seattle on Airport Way. The asseml^v 
inspection was inside that plant. Outside work was 



34 Webster-Brinlxley Co. vs. 

the inspection of parts being made by machine 
shops and foundries on the outside, some in 
Tacoma, Portland, Aberdeen and Hoquiam, Port 
Angeles, Port Townsend, Shelton and Everett, and 
other places in Seattle outside of the Airport plant. 
Between January, 1943, and August, 1944, I did 
some work at those outside plants away from the 
main plant and at those various towns. I did in- 
spec j; work there of castings and parts to be 
assembled at the Webster-Brinkley Co. in Seattle. 
In August, 1914, there was a change made in the 
personnel of the Inspection Department of the 
Webster-Brinkley Co. I was brought in from the 
outside, at first to help out Mr. Fogman to re- 
organize the Inspection Department, that is. to 
acquaint him with the procedure. His title was 
Chief Inspector. I was known as the Assistant 
Chief Inspector. Mr. Fogman 's me was 

Harold. There was no other assistant chief. Tn 
August, 1944, and after I had been designated as 
Assistant Chief Inspector, my primary basic duties 
in the plant were more or less to look over the 
inspection reports in the morning when they came 
in and to work with the other inspectors inside the 
plant and outside the plant. If I remember right, 
there were around 14 or 15 other inspectors at 
that time. My ordinary day's work was as follows: 
I would generally come in at around 7 o'clock. 
Most of the salaried men came in around 8 o'clock, 
if I remember right, but I was always there aroun I 
7 and looked over the inspection reports that came 
into the office from the day before and sorted out 



Thomas B. Belfield 35 

the ones thai were in questioi] and chased some of 
them down for engineering <>r handed them in to 
Mr. Fogman and he would take care of them. He 
had the final say-so on all of them. When I wen: 
there in the morning there were in the box rejecte I 
reports and OK'd reports — material coming in from 
the outside and also from our own shop. 

Q. "Now, what independent, discretionary 
authority did you have over these reports, if any?" 

A. "None." 

Q. "Did anybody else do the same thing that 
you did with regard to these reports?" 

A. "Yes." 

I merely separated the ones that were OK from 
the ones that were rejected. They eventually went 
to Mr. Fogman, the Chief Inspector, from the girl. 
Her name is Mrs. Elliott. That probably took half 
an hour to one hour, at the most, in the morning. 
Then I went out in the plant and worked with the 
rest of the inspectors in the assembly line in the 
shop and in the warehouse. I covered mostly the 
plant, but was on the outside. 

Q. "When you say you did the work of in- 
spector, was it manual work or not?" 

A. "Yes, it was inspecting tools." 

Q. "The same as the other 10 or 12 inspectors?" 

A. "Yes." 

Q. "And you put in the length of an ordinary 

day doing that work?" 

A. "Yes, a regular working day." 



36 Webster-Brinkley Co. vs. 

Mr. Catlett: "I object to the question as 
leading. ' ' 

The Court: "Sustained." 

Q. "What percentage of the day would you say 
was spent doing the work of the other regular 
inspectors in the shop'?" 

A. "90%." 

At that time, I had the title of Assistant Chief 
Inspector. At that time, they had green tags, yellow 
tags and red tags. They had red tags for the re- 
jected material. Any inspector could tie a red tag 
on any part that was in question. With reference 
to the acceptances, the inspectors merely stamped 
an OK on the parts and sent them through, made 
out an OK inspection report and sent that 
through. 

Q. "Mr. Belfield, regarding your authority upon 
accepting and rejecting, what were your primary 
duties or obligations thereto V 

A. "Well, if a part were too much in questi" •. 
it was referred to the Chief Inspector. If he didn't 
give us an answer, he would go to the Engineer! i 
Department and get the answer directly from them. 
I was furnished with blue prints to guide me as to 
the way to inspect and what inspection should be 
made and what allowance should be made. There 
was also a manual furnished each inspector for the 
inspection of parts. He was required to be able to 
use it. The manual was set up by Mr. Thacker. I 
had nothing to do with the making of +he blue 
prints. After August and up until November 15, 



Thomas B. Bel fit Id 37 

I worked for $1.50 an hour, the same rate 1 was 
on on the outside, and then they put me on a 
monthly salary. Prior to that time of changic >m 

the $1.50 rate to the monthly rate, a Mr. M inning 
was working on the outside with me. After I had 
gone inside. Mr. Burdge and Mr. Wallaston were 
working on the outside. They were classified as 
inspectors and paid on the hourly rate. I worked 
various times with all of them. I did the same 
type of work that they did. We had certain par 
to inspect at different shops in town that were bei 
machined or being poured in those foundries — cast- 
ings and weldments being welded up. We would 
merely go around and inspect them with the draw- 
ings, with our tools. When I arrived at a plant 
with, say, Burdge, we got our tools — the ones we 
needed to inspect with. We generally had our tools 
along and we inspected the parts to the drawing. 
I took some parts and he took other parts. Some- 
times we would work together half a day and some- 
times maybe it wouldn't be only an hour or so. 
On both the outside trips and those in Seattle, I 
was paid for my expense and I got car mileage for 
the operation of my car. I kept track of my mileage 
and turned in accounts for it. On about November 
15, I had a discussion with Mr. Fogman relative 
to changing from this $1.50 rate to the rate of a 
per month salary. He was the Chief Inspector from 
August on to November 15, 1944. 

Q. "At that time, what conversation did you 
have with him relative to vour salarv ?" 



38 Webster-BrinMey Co. vs. 

A. "Well, I didn't see where I was going to 
benefit from a monthly salary. Before that time — 
they had talked it oyer with me, and Mr. Fogman — 

if I would come inside for two or three months and 
then later I could go on the outside. That was 

later on changed. They put me on a monthly salary 
anyway." 

Q. "The conversation that you had with Mr. 

ogman in November relative to your changeover 

to the inside, what was said by him as to the 

■ 

amount of hours vou would work and what would 
he the basis of your working?" 

A. "First, he wrote some figures down on a 
piece of paper — as to how much I was going to get 
an hour. He said there wouldn't be no overtime 
with that. Before I had been working long hours 
on the outside and inside after they had called me 
lack in from the outside." 

Exhibit 1 is my checks during August, September 
and some of the October checks prior to the time 
I went on a monthly salary. 

* * 

The witness, asked to designate a few of the 
checks and the amount of hours and wages, said: 

Here, it starts in the 9th month in 1944: 11 
hours, 15% hours, 12 hours, 15, 10 and 10. The 
11th month.. 1944: 11% hours, $19.88; 10 hours for 
the 7th, $16.50; on the 8th. 11.3 hours, $23.25— my 

istake, that was 13 hours. And on the 9th, 13 
hours, $23.25; the 10th, 13 hours, $23.25: the 11th, 
10 hours, $22.50; and the 12th, 11 hours— no, that 

not right. 



Thomas R. Bel field 

(). "Mr. Belfield, how much overtime work i 
you work on the average?" 

A. "Not quite so much as other wee 1 ..-. 
sometimes, I would be there until 10:00 or 12:00 
o'clock at night and probably some nights loi 

Q. "What did he say to you and what did yon 
say to him about your salary?" 

A. "That I didn't have to work overtime, that 
the job would be easier than the outside and I could 
be home every night and I would get $2.00 and 
something an hour. He figured it out. I don't know 
how r he did it. It was a little more than $2.00 an 
hour. At that time, I was getting pretty tired. I had 
been working long hours for about two years. From 
the time I went to work in January of 1943 until 
I retired in May of 1945, I missed but a few days 
but during the last year I never missed a day — 
during the time we were making the winch job. 
That was the hottest job. They needed that job out. 
I had a perfect attendance record that year." 

Q. "After you went on the salary basis, what 
were your duties?" 

A. "Well, more or less, just coming to the office 
in the morning and going through some of the 
reports and passing them on. I talked with Mr. 
Fogman and then worked with the other fellows 
during the day in the plant." 

Q. "What was the difference in your v 
the plant after An at it had been b< fore ?" 

A. "None. It was the same type of work outside 
of sitting there in the office for about an hon 



40 Webster-Brinkley Co. vs. 

the morning, or half hour to one hour. That started 
in August. The duties after November 15 were just 
the same as prior to that. I was asked by Mr. Fog- 
man to work overtime after November 15 and I had 
to do so. At that time we were frozen in our jobs." 

At that time, a statement of salary overtime 
starting November 19, 1944, was marked plaintiff's 
Exhibit 2 for identification and a Work Clearance 
and Referral was marked plaintiff's Exhibit 3 for 
identification. 

The Witness (Continuing) : With regard to 
signing inspection reports, I did sign reports of 
rejections and exceptions. Other inspectors did the 
same thing. I did not have authority to hire and 
fire employees in the Inspection Department. I was 
not consulted as to who should be hired and who 
should be fired. When I was away from the plant 
with Mr. Burdge, I did not tell him what to accept 
and what to reject. He followed the general direc- 
tion himself. He knew more about the work on 
the outside at that time than I did. He worked 
constantly at that. After November 15, I did work 
overtime. If I remember right — I am pretty sure — 
I protested to Mr. McCarthy and several times to 
Mr. Fogman about it. I kept a record of the time 
I worked overtime. T did not ask the company 
officials to keep any record or to give me any record. 
Mr. Fogman and his secretary knew I was keeping 
a record of the overtime. I turned my overtime in 
to his secretary. T talked it over with her that I 
wanted her to keep track of my overtime and f< r 
her to turn it in — to me — from time to time. I 



Thomas R. Belfield 41 

showed it to Mr. Fogman several times. He said 
he was going to take it up with Mr. McCarthy or 
Mr. Washington. They were officials of the 
Webster-Brinkley Co. 

Plaintiff's Exhibit 2 is the overtime record in 
my handwriting. Plaintiff's Exhibit is an overtime 
record for the amount of overtime I worked. It is 
kept on the exhibit by the day, the month and the 
amount of overtime. I kept that record myself 
personally. During the time I was with Webster- 
Brinkley Co., I kept a record of my overtime even 
before I was on a salary. All hourly men generally 
carry a timebook or keep their overtime record 
from week to week. 

Mr. Stewart: "I offer plaintiff's Exhibit 2 in 
evidence." 

Mr. Catlett: "I object to its admission. In the 
first place, I would like to ask some questions with 
reference to it before your Honor even passes upon 
the question of admissibility." 

The Court: "I will let you do that now, if you 
want to." 

Mr. Catlett: "Mr. Belfield, what was the pri- 
marv record that you made of vour overtime?" 

A. "Well, on one I kept a desk calendar, a loose 
leaf calendar and also a timebook." 

Q. "Where is the desk calendar and where is the 
timebook?" 

A. "We have got part of it. The wife had part 
of it. We took it all together and put it on this 
sheet." 



42 Webster-Brinkley Co. vs. 

Q. "That sheet, then represents a tabulation 
taken from other enteries?" 

A. "Yes." 

Q. ''Where are the original enteries?" 

A. "I have the timebook at home in Spokane. 
The other one the kids tore up — painted pictures on 
them and different things." 

Mr. Catlett: "If your Honor please, I am going 
to object to the entry of this secondary evidence. We 
are entitled to have the original enteries if they can 
be produced and part of them can be produced." 

The Court: "When did you make this record, 
you and your wife?" 

The Witness: "That was right after I quit 
Webster-Brinkley and went to Western Gear." 

The Court: "You didn't make up this daily as a 
part of your daily work and routine, this record?" 

The Witness: "No." 

The Court: "The objection is sustained." 
Mr. Stewart: "Do you know how many hours of 
overtime you worked, Mr. Belfield?" 
A. "Yes." 

Q. "Will you please state how many hours of 
overtime you worked between November 15, 1944 
and May 15, 1945?" [8] 

Mr. Catlett: "Of course, that question means, I 
assume, how many he worked as he can testify now 
of his own knowledge, separate and apart from any 
record of figures that he has there." 

The Court: "It is so ordered — that he can re- 



Thomas B.Bel field 43 

fresh his recollection from figures of the character 






mentioned a few moments ago. 

A. "There v three days that I remember in 
one week that I had worked — on one day I had 
worked the clock around. I worked 24 hours." 

The Court: "Mr. Reporter, will you read the 
question }" 

Q. "Will you please state how many hours of 
overtime you worked between November 15, 1944 
and May 15, 1945?" 

The Court: "If you know, state that and not 
something else." 

Q. (By Mr. Stewart) "State the number of 
hours you worked." 

A. "I have 300 and some hours in the timebook 
at home." 

Mr. Catlett: "Now, your Honor " 

The Court: "The objection is sustained. You 
will have to answer the queston — not some other 
question." 

Q. (By Mr. Stewart) : "Just state how many 
hours you worked, the total number of hours you 
worked." 

A. "I can't answer that." 

Mr. Stewart: "Your Honor, I will have to ask 
to withdraw the witness from the stand at this 
time." 

The Court: "You may do so." 

Mr. Stewart: "Will you step down, please V' 
(Witness excused.) 

Mr. Stewart: "I will recall the same witness." 



44 Webster-Brinkley Co. vs. 

Mr. ( Jatlett : "If your Honor please, I object/' 

The Court: "There was no request made to have 
the witness resume the stand after conferring with 
the witness." 

Mr. Stewart: "The witness is a working man. 
He does not know the workings of the law. When 
I asked if the witness could step down, I thought it 
was understood that I could interrogate him.' 

The Court: "I didn't so understand." 



LLOYD M. BURDGE 

called as a witness by the Plaintiff, being first 
duly sworn, testified as follows: My name is Lloyd 
M. Burdge, my address 3907 Morgan St., Seattle, 
my occupation machinist. I have worked at that 
20 years. I am acquainted with Mr. Thomas Bel- 
field. I was employed by the Webster-Brinkley Co. 
for 5 years from 1941 to 1946. Originally, I worked 
in the shop as a machinist for a period of about 2% 
years, then I worked as a leadman in the shop for a 
little better than a year and the last of my time I 
spent as an inspector. Chiefly, my work was with 
the outside inspectors. Most of them were located 
here iu Seattle, some of them were out. I made trips 
to Tacoma and to Everett. I was paid an hourly 
rate of $1.50 an hour. I got overtime after eight 
hours a day, regardless of the week. There was 
nobody over me when I went away from the plant to 
inspect. I was my own boss when T was away from 
the plant. When T went away to the outside jobs I 



Thomas R. Bel field 

always took with tne the necessary blueprints of the 
parts we might haw to inspect and the necessary 
tools or instruments we would need to cheek the 
measurements with. I had the responsibility of ac- 
centing or rejecting on my own as to whether it 
would pass or not. If it didn't pass, I tagged it with 
a reject tag and made a report to that effect. I had 
that authority from the company. There were a 
number of occasions that Mr. Thomas Belfield went 
with me. 

Q. k< What percentage of the time do you believe 
between November, 1944 and May, 1945 he might 
have been with you on these jobs?" 

Mr. Catlett: "If your Honor please, I submit 
that that is an unintelligible question. He testified 
that Mr. Belfield went w T ith him on a few occasions. 
He didn't say anything that would give us a base 
for estimating the percentage — such a percentage as 
we have in this case. ' ' 

The Court: "The objection overruled." 

A. "Well, there w T ere times when Mr. Belfield 
would go with me and we might work an entire day 
together. There were other times that we might call 
on the supplier and there would be a couple of hours 
work. I would say that possibly 10% of the time he 
spent with me." 

I would say that would be about right on these 
outside jobs. When he went with me, if they were 
large, cumbersome parts, we would work on the 
same part to check. At other times, he would be 
checking the same identical part, doing the same 



Webster-Brinldey Co. vs. 

thing I was doing. That practice was followed each 
time we went on these jobs. 

Q. "Will you explain how you inspected, if you 
will — how you used your instruments." 

A. "We had prints. Tolerances were given on 
the prints that the parts were to conform to. We 
would measure with micrometers for the sizes to de- 
termine if they were within the specifications.' 1 

Lots of pieces were large and it wouldn't be pos- 
sible for one man to turn them over, to pick them up 
or do any handling that you might have to do to 
check them. Mr. Belfield was engaged in the same 
kind of work that I did in lifting and turning these 
parts around. When I was handling a large cumber- 
some piece, he helped me in turning and testing it. 
He followed that practice during all of the time that 
we would be on the job together. On these trips 
away from the plant, I was allowed costs for operat- 
ing my own car from the plant. Sometimes I rode 
witli Mr. Belfield and sometimes he rode with me. It 
would just depend upon whose car w r as handiest. If 
it was my car, I turned in an expense account. If I 
used Mr. Belfield 's car, I would turn in his account. 

On cross-examination, Mr. Burdge testified: I 
worked with Mr. Belfield when he was an inspector. 
My testimony was concerned with the time he was 
inspector. From, the time that I came into the 
Inspection Department, he had the title of Assistant 
Chief Inspector. When we made an inspection, we 
did not always make a report. The reports w< 
made only on rejected material. When made on 
rejected material, T signed them. I placed them in 



Thomas S.Bel field 47 

the offiV 1 a baskel to plac< t] 

On the ; , they were 

consider •. Belfield. So ft I know, 

checked ■ r to see if they were made out cor- 

rectly, thai is, whether I had made an error in my 
pencil work on them, and they then went to the girl 
to be typewritten on another form. Very rarely did 
Mr. BelfieM check to see whether or not the mate- 
rials really should be rejected. I can't say I recall 
of him ever doing that." 

Q. "Didn't questions frequently arise as to 
whether or not materials should be rejected or were 
usable f" 

A. "Yes, sometimes, if they were very near to 
the tolerances on the print, the discussion did come 
up as to whether they could be used or passed. ' : 

Q. "When you say that your judgment on a 
matter was final, isn't it true, as a matter of fact, 
that many cases did go beyond you to Mr. Belfield 
or to his superior for further action?" 

A. "That is true, if it was a questionable part. 
If it were definitely beyond print dimensions, why, I 
would write a reject on it and it was accepted 
that way without any further question." 

There were also government inspectors on these 
jobs from time to time. They also might reject. If 
they rejected, the part was scrapped then. We had 
no recourse after the government inspectors rejected 
it. 

Q. "Let me ask you if Mr. Belfield didn't fre- 
quently check up on parts rejected by the govern- 



48 Webster-Brinkley Co. vs. 

merit inspectors to see whether or not the}' agreed 
with them or whether the parts could be used?'' 

A. "Well, I wouldn't know about that because 
most of my time was spent with the outside inspec- 
tors and if they had any such discussions with the 
Navy or Maritime inspectors, they were at the plant 
and I wasn't present." 

Q. "The inspections you made w T ere what might 
be called original inspections, weren't they?" 

A. "Yes." 

Q. "That would be the first inspection made by 
anyone connected with the Webster-Brinkley Co.?" 

A. "Yes, that is true." 

Q. "It was necessary to keep your inspectors in 
these suppliers' plants in order to see that the mate- 
rials that came down to the Webster-Brinkley Co. 
were satisfactory, wasn't it?" 

A. "That is right." 

Q. "They frequently had a good deal of trouble 
over defective parts or parts that did not come up to 
specifications, isn't that true?" 

A. "Occasionally, there was not an awful lot of 
that." 

Q. "Did you ever see Mr. Belfield coming down 
to reinspect parts?" 

A. "I believe I have asked him to come down. 
We used to get castings sometimes that were faulty 
— that had cracks or were poor castings and I was 
doubtful as to whether they could be used. I used 
to ask Mr. Belfield to come down and look at it." 



Thomas R. Bel field 49 

On redirect examination, Mr. Burdge testified: 
I had authority to talk with the Engineering Depart- 
ment. I was five to go to the Engineering Depart- 
ment at any time with questions. If a part didn't 
come up to specifications, I could go direct to them 
and ask them whether to pass it or not. I have done 
that on a number of occasions. 

Q. "Did you say that frequently you have done 
that?" 

A. "Well, those things didn't come up too often, 
but I have done that." 

On recross-examination, Mr. Burdge testified: I 
was using the blueprints made by the Engineering 
Department. 

Q. "So that would be the natural place to in- 
quire concerning the blueprints and whether or not 
a particular part would qualify, wouldn't it?'' 

A. "Well, not always, if the Chief Inspector was 
in the office I would go to him. Quite often, maybe, 
this thing had been acted on in the shop with this 
same identical piece or had been acted on by the 
engineers." 

Q. "But you weren't under the Engineering 
Department at all?" 

A. "No." 

Q. "You were supervised entirely by Mr. Bel- 
field?" 

A. "And Mr. Fogman. Mr. Fogman was the 
Chief Inspector." 



50 Webster-Brinkley Co. vs. 

ROBERT S. EDMISTEN, 

called as a witness by the plaintiff, being first duly 
sworn, testified as follows on direct examination: 
My name is Robert S. Edmisten. I am a mechanic. 
I am acquainted with Thomas R. Belfield and 
worked with him for quite some time. I did not work 
for him for the full period in the Webster-Brinkley 
plant between November 15, 1944 and May, 1945. I 
worked for him part of that time — with him and 
when I went on as a leadman, they asked me to 
work with him on inspection, due to the fact that I 
had worked on inspection and when I went on as a 
leadman we could work along with each other. I 
did work as inspector then in the Webster-Brinkley 
plant for a year. Then I was transferred to the 
leadman of machinists. While I was leadman, they 
asked to me work also with the inspector. When I 
was working in the Inspection Department, there 
were approximately 10 men and one or two women 
in it. I was working inside the plant as an assembly 
inspector. My job was to inspect the assembly of 
machines and see that they would pass the Maritime 
or Navy inspection properly assembled. While I 
worked as assembly inspector, I saw Mr. Belfield 
engaged in the same thing. I have never seen him 
walk through the shop that he didn't have some work 
of that type before he went through. I was there 
practically every day during the period from Nov- 
ember, 1944 to Mav, 1945. 

Q. "Did you see Mr. Belfield there practically 
daily during that time ? ' ' 



Thomas R. Belfield 51 

A. "Well, at first lie was on the road and I 
would see him about three or four days a week, pos- 
sibly, around the plant." 

By on the road, I mean outside the plant. When 
he was working in the plant on the days I was 
there, he would be doing the same class of work T 
would be doing which would be accepting or reject- 
ing parts that went into the machinery. While he 
w T as in plant, he would be engaged in that kind of 
work about 75% of the time, as near as I could figure 
out. When he inspected as I did, he used our preci- 
sion tools used to check depth and tolerances. I had 
authority to put a reject on an article if it didn't 
meet specifications. All the other inspectors had 
that right. If it didn't pass inspection or I was 
doubtful about it, I had two things I could do. On 
some inspections, like the gears of the winch jobs, if 
the Maritime inspector w T as there and if he thought 
it could be reworked on the floor, why, he would 
give me authority to go ahead and have it welded or 
fixed or whatever the procedure would be on it. On 
some things that he had no connection with, I would 
just send my rejects through and then it would go 
into the inspection office. I would give it to the sec- 
retary. I had authority to consult the Engineering 
Department upon the result of my inspection and I 
did so. I had in my possession each day that I work- 
ed in the plant blueprints and a manual of works 
procedure. With those, I guarded myself as to my 
inspections. When I first went to work, the Chief 
of the Inspection Department was Earl Rulofson. 
Later on, I worked for Hal Fogman. I consulted 



- ) 



Webster-Brinkley Co. vs. 



Mr. Pogman. I sometimes consulted Mr. Belfield 
on allowed tolerances to see if they would pass. 

Q. "If a novel question came up and you re- 
quested Mr. Belfield what would be the result of 
that inspection ; what did he do about it V' 

A. "Well, he would say, 'Well, let's go over and 
take a look at it', and he would take his prints and 
tools required. He would look at it and say, 'Well, 
maybe we had better make a report on it and have 
Fogman or Engineering come down and take a look 
at it or the Maritime inspectors'. 



. . , 



On cross-examination, Mr. Edmisten testified: I 
worked at Webster-Brinkley Company about seven 
months. I was in the Inspection Department for 
about five months and then went in with the winch 
job in June, 1944. I was in the Inspection Depart- 
ment beginning in 1943 and until June, 1944. At that 
time, I became a leadman and was asked to work 
with the inspectors, and I rejected and worked in 
gears after that time, too. As leadman, I was post 1 
on the assembly. I would not know only about 
inspections that were made there in the assembly. 
We had the opportunity to walk through the shops 
into the machine shops and were called in by Inspec- 
tion and asked by Inspection to go over and look 
at a part, and see if we could use it on any piece 
of equipment; go right straight to the inspection 
table or to the machine at any time we wanted to. 
My instructions did come from Hal Fogman. I 
never did have an order from Belfield. Fogman 
was often absent but I never had to get instructions 



Thomas R. Bel field 53 

Prom Belfield. 1 was asked to work with Inspection, 
carrying a Leadman's rate. I did make inspections 
myself and I did sign inspection reports. There is 
more than one type of inspections. There is the 
inspection of a machine product coming off the 
the machines or there is the inspection of the com- 
pleted machine after it is ready and being assembled. 
After it has passed the first inspection, if it is 
rejected, whether it goes up to the inspection, if it is 
depends upon whether that rejection can be reworked 
in the 1 machine shop and not have to go to the 
inspection. For instance, we may find a crooked 
shaft or something like that. Anybody that was a 
machinist could figure out whether it can be reworked 
or not. I could or a machine shop foreman or 
anybody could determine w T hether or not a piece 
w T as to be reworked. Anybody was entitled to re- 
work. I didn't have to have any written authoriza- 
tion on small cases. On larger cases, the Maritime 
mostly on my deal, would come around and say, 
"Well, we can rework this," or "Let's have it 
thrown out", then I would make my report, put the 
red tag on it and send it to the girl in the inspection 
office. I wasn't with Mr. Belfield all of the time, 
but when he was in the plant, a large part of the 
time. He was, however, often out of the plant. On 
two or three different trips I went with him to 
Seattle to see if something could be used in the line 
or not for tolerances, to see if something which had 
been a reject could be used on the line. Say some- 
thing had a tolerance of a 2 thousandths in the 
machine shop. I had worked on this prior to my time 
in inspection. I had been a machinist on the floor. 
Sometimes thev would ask tyip tn rirl^ nlnno* axti+Vi 



54 W ebster-Brinldey Co. vs. 

Belfield to see if that part could be used. I did not 
go along really as the expert specialist. There are 
a lot of those things where you might be working on 
one thing here and I am working on something else 
over here. You might be asked to look at something 
that goes on my line. It wouldn't work so they 
would ask me to go over and help you out and ask 
me if that would work. When, seeing Mr. Belfield 
on the floor a lot of times, I would ask his advice — 
should we use it or shouldn't we use it. That would 
be about all. 

Q. " Weren't there always questions of rejections 
and reworks where you would have to come out and 
decide the matter for the Inspection Department V' 

A. "No." 

THOMAS R. BELFIELD, 

recalled as a witness on his own behalf, testified as 
follows on direct examination: I have never been a 
witness before. I was on the stand here this after- 
noon and was asked a question regarding the overtime 
that I worked. 

Q. "Were you confused as to the questions that 
were asked you pertaining to it?" 

A. "Yes, sir, I was." 

Q. "What was the confusion in your mind?" 

A. "Well, I thought I couldn't answer that ques- 
tion on that overtime — the total amount of overtime 
that I had. I didn't think I could answer that thej 
same as it was on the paper." 

Q. "Prom the ruling the court had made and 
from what was said?" 



Thomas R. Bel field 55 

A. "That is right." 

Q. "Well, did you know personally and of your 
own knowledge without reference to the exhibit 
before you what your overtime was?" 

A. "Yes." 

Q. "Did you know?" A. "Yes." 

Q. "And you know now, do you?' : A. "Yes.' ! 

Q. "What is it?" A. "591 hours." 

Q. "Would you say w T hat period of time that 
was?" 

A. "That was from November 15 until along 
about May 15." 

The Court: "What year, November 15 of what 
year?" 

The Witness: "1944." 

The Court: "To May " 

The Witness: "1945." 

The Court: "The total was w T hat, as vou stated 
just now?" 

The Witness: "591 hours." 

Q. "What was your basic week, Mr. Belfleld?" 

A. "Well, while I was at $1.50, it was supposed 
to be 40 hours. We got paid for overtime over 40 
hours. After we went on salary, I think it was sup- 
posed to be 44 hours." 

Q. "A 44-hour week?" 

A. "Yes." 

Q. "This overtime is computed on that basis, is 
it?" 

Mr. Catlett: "If your Honor please, I object to 
that as leading." 



Webster-Brinkley Co. vs. 

The Court: ''Sustained. You may ask him how- 
it is computed." 

Mr. Stewart: "You may cross-examine." 

On cross-examination, Mr. Beltield testified: 

Q. "Mr. Belfield, can you tell us the total number 
of hours you worked in any single day or in any 
single week between November 20, 1944 and May 12, 
1945 r' 

A. "Any single day or any single week ?" 

Q. "The question is any single day or any single 
week." 

A. "Yes, from that paper that I turned in." 

Q. "You have no recollection apart from that 
paper, have you, of the time that you worked?" 

A. "No, I don't believe I could. That has been 
quite a while ago." 

As inspector, it was one of my functions to make 
inspection reports. In August, 1944, I was brought 
in to the Inspection Department merely to help Mr. 
Fogman out — to acquaint him with inspection. The 
department was reorganized but not by me. I would 
say there were between 10 and 15 inspectors in the 
department, not more than 15. I don't know whether 
or not there were any junior inspectors. I have 
never seen any classifications. There was one helper 
that I know of. I think there was only one clerical 
helper. Mr. Fogman was absent at times. I was not 
the acting chief of the department when he was 
absent. I think Mr. McCarthv was. I mean Mr. 

■ 

McCarthy, the General Manager of the plant. As 

Assistant Chief Inspector, my functions were that I 



Tli o m as R. Belfi eld 57 

would come in in the morning and look over the in- 
spection reports. Inspection reports that had been 
typed up and wrote up the day before made by 
other inspectors and by myself. Then 4 was a differ- 
ence in the type of report made by me that I signed 
and the type of report made by the inspector. The 
difference between those two types of reports was 
that some of them were typed and some of them 
were pencilled. One was what they called a pencilled 
form and the other was a typewritten form. I didn't 
make reports where I reinspected parts — machinery, 
unless it was something that was pretty had. Gener- 
ally, we would get the Engineering Department in 
on it or the Chief Inspector. The inspectors gener- 
ally signed their reports. When I made an ordinary 
inspection report, I signed it. The files and records 
ought to contain the ordinary inspection reports 
which I made during this period of time. There 
was different treatment if the report came in report- 
ing the part OK or if it rejected the part. The 
difference was that most all of the OK'd reports 
were sent through to the girl to be typed up without 
even looking at them. The rejected reports were 
gone over by Mr. Fogman and myself and Engineer- 
ing at different times. The reports that were favor- 
able were typed up by the girl and signed as a mere 
formality. 

Q. "Did you ever sign any of those?" 

A. "Yes." 

Q. "In fact, you signed all of those when Mr. 
Fogman was absent, didn't you?" 



53 Webster-Brinkley Co. vs. 

A. "Yes, and there were other inspectors that 
signed those, too. Mr. Wallace signed them." 

Q. "Mr. Wallace would approve them, do you 
mean ? y ' 

A. "Yes, also the secretary there. She would 
OK them." 

Q. "You were talking about the OK'd reports'?" 
A. "Yes." 

Q. "All of the others came to you or Mr. Fog- 
man?" A. "No." 

Q. "Where did they go?" 

A. "Well, sometimes Mr. Fogman would have 
them. Sometimes I would have them. Sometimes 
expediters would come in and get them and take 
them directly up to Planning or Engineering and they 
were taken care of there." 

Q. "Well, you would necessarily on matters of 
that sort have to take the advice of Engineering, 
wouldn't you, especilly as to whether they could be 
reworked?" 

A. "Not necessarily Engineering. We could take 
the advice of the shop men or the leadmen in assem- 
bly or the assembly foreman." 

It was the function of Mr. Fogman and myself to 
adjust that matter in some fashion and determine 
whether or not rejected parts could be reworked or 
whether anything could be done with it or whether it 
should be simply cast aside. 

Q. "Now, of course, w r ould you go out sometimes 
and reinspect these parts yourself to see if you 
thought the original inspection was an error?" 



Thomas R. Belfi eld 59 

A. "No, not necessarily. I never had the time 
to do that." 

Q. " You never did that all ? ' ' 

A. "Well, on certain occasions I did, yes.' : 

Q. "And, of course, if you did that, you had to 
take the measurements, didn't you?" 

A. "I hardly ever reinspected other inspectors' 
work. Most of them there, that we had working for 
us, were men that could read prints." 

No disputes ever arose between our inspectors and 
the government inspectors. No disagreements as to 
whether or not a particular part qualified. That 
would be up to the assembly man or the assembly 
foreman or the plant superintendent. 

Q. "Do you mean to say there were no differences 
of opinion between the inspectors of Webster- 
Brinkley Co. and the government inspectors over 
parts?" 

A. "Well, yes, there would be certain things 
come up like that but on assembly that was 
handled by the leadman or the plant superintendent 
or the assembly foreman. Parts that we got into the 
warehouse from the outside or the shop, that was 
handled by Mr. Fogman or Engineering — mostly 
Engineering, whatever engineer was assigned to that 
particular job." 

Q. "Didn't they at times get up to you, too, 
especially in Mr. Fogman 's absence?" 

A. "Yes, but we never had any final say-so on 
that. It would be up to Engineering." 

Q. "Were you ever in on any conferences with 
the General Manager or the Works Manager or the 



60 Webster-Brhikley Co. vs. 

heads of these other departments in connection with 
some of these difficulties which arose ?" 

A. "Yes, once/' 

Q. "You remember one. Only one?" 

A. "Yes." 

That arose over a statement that I made that a 
jig should be built to set these gears into to get your 
clearance and the Maritime man misunderstood me. 
He said, "We built some jigs that way and decided 
to throw them away because the gears weren't any 
good; it wouldn't match on the jigs." I have been 
in ill health for the last three years. It has not been 
continuous. It started before I left Webster- 
Brinkley. 

Q. "There was nothing in the world to prevent 
you from resigning from Webster-Brinkley, was 
there?" A. "Yes." 

Q. "Well, you know perfectly well a lot of men 
did quit?" 

A. "Yes, I did. I asked to get out of there two 
or three different times, from Mr. Pogman, and he 
told me Mr. McCarthy wouldn't give me a referral." 

Q. "You were now asking for a referral to some 
other job. You could have quit any time you wanted 
to?" 

A. "Yes, but I couldn't take on another job un- 
less I had a referral." 

Q. "You could, however, under the regulations 
of the Manpower Commission, have forced a refer- 
ral, couldn't you — especially on the reason of ill 
health?" 



Thomas R. Bel field 61 

A. "That is what I was going to do until they 
told me I could sro to Western Gear; Rusty Callow 
told me if I could go to Western Gear, he could get 
a referral for me." 

Q. "But you know you could have forced a 
referral at any time that you wanted to go to the 
Manpower Commission and present your case, didn't 
you ?" 

A. "I had heard about so many going up there 
and presenting a case like that and they never got 
anywhere." 

Q. "Did you say that you protested the fact that 
you weren't getting overtime to Mr. McCarthy?'' 

A. "No, to Mr. Fogman." 

Q. "Oh, to Mr. Fogman. What did you say you 
protested to Mr. McCarthy?" 

A. "I protested to Mr. McCrthy just about every 
day there for about two months." 

Q. "For what?" 

A. "Well, for different things in the Inspection 
Department. ' ' 

Q. "Oh, — other matters, not this question of 
overtime ? ' ' A. " Overtime, yes. ' ' 

Q. "Isn't it a fact that you never made any claim 
to overtime until you made it after you quit 
work and quite a time after, as I recall it, to Mr. 
Gregson ? ' ' 

A. "Yes. If I remember right, it was six months 
after I had left Webster-Brinkley and was working 
for Western Gear." 

Q. "That was the first time that you had ever had 
presented a request for overtime, wasn't it?" 



62 Webster-BrinMey Co. vs. 

A. "That was the first time I had made any 
request under this law." 

Q. "You testified, I think, on your direct exam- 
ination, that Mr. Fogman told you when he made the 
arrangement with you to be Assistant Chief Inspector 
at $425.00 a month, there would be no overtime." 

A. "Yes." 

Q. "Asa matter of fact, you took the job know- 
ing you would have to spend whatever amount of 
time the job called for to do it right, didn't you?" 

A. "No, because they were reorganizing the 
Inspection Department and they were going to get 
better and more men all of the time." 

Q. "Nevertheless, you knew that you w r ould have 
to work some overtime, didn't you?" 

A. w 'No, I didn't know anything about it at that 
time." 

Q. "Well, you anticipated it, didn't you? You 
had been being paid by the hour?" 

A. "But I was working on the outside when I 
was paid by the hour — outside and inside part of 
the time." 

Q. "But you did work overtime of your own 
free will, didn't you?" 

A. "Well, yes, the work had to be got out of 
there. There was a certain amount of work that 
had to be gotten out so it wouldn't stop the line. 
Somebody had to do it." 

Q. "Surely. Didn't all the supervisory officials 
work overtime ? " A. " No. ' ' 

(>. "Are you sure? About that?" 

A. "Yes." 



Thomas R.Bel field 63 

Q. "You are quite sure of that?" 
A. "Yes." 

Q. "You came and went as you pleased during 
the day, did you not ?" 

A. "No. I had to have a slip signed by Fogman 
to get out of the place." 

Q. "Supposing Fogman wasn't there'" 

A. "He signed them and gave the office girl a 
bunch of them to keep in her desk drawer to be 
issued when we went out after we told her what it 
was for. We had to put our reason and what time 
we went and what time w r e returned." 

Q. "You could readily do that, couldn't you?'' 

A. "I suppose we could." 

On redirect examination, Mr. Belfield testified: 
I think everybody in the plant knew I was working 
this overtime and I protested to everybody I seen 
there, toward the last, to Mr. McCarthy and Mr. 
Fogman, mostly Mr. Fogman. After I left the com- 
pany, I went to Western Gear. Mr. Bannan was 
president of Webster-Brinkley and he was also con- 
nected with Western Gear. After I was out of that, 
I brought this action for overtime and made demand 
in that fashion. 

On recross-examination, Mr. Belfield testified: I 
did not get my pay or paychecks from Mr. Fogman. 
He was my superior, though. I didn't ask Mr. Fog- 
man to pay me for any overtime. 

The plaintiff rested. 

Mr. Catlett: "I desire to make a motion to dis- 
miss the case as to Mr. Belfield. I don't think there 



64 Webster-Brinkley Co. vs. 

has been sufficient evidence presented by Mr. Bel- 
field himself to justify your Honor in granting any 
judgment of overtime for Mr. Belfield. I think you 
might dispose of it now and shorten this matter and 
then proceed with Mr. Foster's case." 

The Court: "I am not prepared to take that view 
of it at this state, and the motion is denied." 



HERBERT R. WASHINGTON 

a witness on behalf of the defendant, being first duly 
sworn, testified as follows on direct examination: 
My full name is Herbert R. Washington. I reside 
at Medina, Washington. I was during the time in 
question in this case and am still Assistant Treas- 
urer of Webster-Brinkley Co. As Assistant Treas- 
urer, matters of securing authority from the 
governmental departments such as the Stabilization 
Unit and the Bureau of Internal Revenue fell 
within my jurisdiction. 

Letter and application marked defendant's Ex- 
hibit A-8 for identification was then produced. The 
witness, continuing: Defendant's Exhibit A-8 for 
identification is an application made to the Salary 
Stabilization Unit by the Webster-Brinkley Co. It 
affects John Poster and Thomas Belfield. On the 
reverse side is the official action of the Stabilization 
Unit. It is the original received by Webster-Brink- 
ley ( 1 <>. from the Stabilization Unit. 

(The court reserved ruling on admissibility.) 

The witness, continuing: I did not have any direct 



TlmmasR. Belfield 65 

connection with Mr. Belfield. I have secured and 
br< ught up here the inspection reports made by our 
inspectors during this period of time. They are 
atained in two large cases which you see here in 
the courtroom. At Mr. Catlett's request, I went 
over personally those inspection reports. They arc 
the official records of the Webster-Brinkley Co. I 
think they are the actual and original inspection re- 
ports submitted to Webster-Brinkley by its various 
inspectors during this period of time. I checked 
all of those reports to ascertain how the inspection 
reports were signed by either Mr. Fogman or Mr. 
Belfield during the period from November 16, 1944 
to May 15, 1945. 

(A tabulation of inspection reports marked 
defendant's Exhibit A-10 for identification was 
produced.) 

Mr. Catlett: "As I stated before, if your Honor 
please, T have the originals right here in the court- 
room. Of course, they are so numerous it isn't 
feasible to introduce, I suppose, the whole bunch. 
For that reason, I asked Mr. Washington to make 
this personal check and tabulation for the benefit of 
the court." 

The Court: "Do you now tender these records 
which you claim are original records to inspection 
by plaintiffs?" 

Mr. Catlett: "Yes, I do. Plaintiffs are quite 
at liberty to inspect the original records.'' 

(At his request, Mr. Stewart was permitted 



66 Webster-Brinkley Co. vs. 

to make preliminary examination of the wit- 
ness.) 

On examination by Mr. Stewart, Mr. Washington 
testified: I examined the inspection reports only 
from November 16, 1944 to May 15, 1945. The re- 
port shows the original inspector. I have got a 
number of these inspection sheets that are signed 
by other inspectors in the department. The inspec- 
tion reports showed that where the lot of goods 
inspected was aj^proved, it was then not signed for 
approval by either Mr. Belfield or Mr. Fogman 
personally but was initialled only with the initials 
ks IIF ? by the secretary, as Mr. Belfield testified. 
It was only those inspection reports that showed re- 
jections that were then actually signed by either 
Mr. Fogman or Mr. Belfield and this list refers only 
to the rejected reports signed personally as ap- 
proved by Mr. Belfield or Mr. Fogman. It does not 
refer to the inspection reports that were OK but 
were not signed personally for approval. I would 
not know the number of inspection reports in the 
period of time worked. It is about a case and one 
half of them there. I have no idea how many. I 
have gone through the file but I did not take out 
the Fogman and Belfield reports. I have tabulated 
only those reports which, because they showed rejec- 
tion, had to come before either Mr. Belfield or Mr. 
Fogman for their approval. So far as the pro- 
cedure down in the Inspection Department, I know 
i iilv what I have learned from the file. The other 
inspectors in the department besides Mr. Belfield 



Thomas R. Belfield 67 

did nol sign approval of rejection slips. I und 
stand that they did not have the same authority as 
Belfield to sign rejections. 

On further examination by Mr. Catlett, Mr. 
Washington testified: I will step down and take out 
of the file one of these reports to which I refer so 
that we may all know what we are talking about. 

The Court: "Pick out a group of them." 

Q. (By Mr. Catlett) : "Yes, pick out a group of 
them." 

The Court: "And display them in the presence 
of counsel for plaintiff." 

The Witness, continuing: This document which 
I have in my hand and have just removed from the 
filing case is a folder containing a quantity of in- 
spection reports. The top one is numbered 28000 
dated December 2, 1944. It contains information 
as to the material, the number, the vendor — Pacific 
Wire & Steel Co. — our job number, the purchase 
order number, the receiving report number and shop 
rejection on four parts. It shows that the first 
inspection was made by inspector O'Neil. Because 
it is a rejection, it is initialled in Mr. Belfield 's 
handwriting "TB". The next one is number 28001. 
It shows dated 11/30/44. It shows from Pacific 
Wire & Steel, that it was a brake band assembly, 
that six were inspected, that the inspector was Holt. 
The Chief Inspector was supposed to sign it and 
because it was accepted, the girl had signed "HF' 
— Harold Fogman. The next one is 23003. It 
shows "acceptance", also signed with the initials- 

HF" and shows the inspector Wallaston. Here is 






68 Webster-Brinkley Co. vs. 

one 28005. It shews Westinghouse Electric Com- 
pany, electric motors, one rejected. It shows that 
Shadix was the original inspector and because it 
was rejected, Mr. Fogman has signed "F-O-G- 
M-A-N." 

Mr. Stewart: "If your Honor please, at this 
point I think it would be well — I think I understand 
it — to give an opportunity the first thing in the 
morning, probably because court starts in order not 
to lose any time, to come and look at it and then I 
think our objection may be withdrawn or renewed, 
depending upon what the circumstance is." 

The Court : % k I think that is a privilege that 
should be granted." 

The Witness, continuing : Referring to defend- 
ant's Exhibit A-10 for identification, this list deals 
only with those that show rejections and were there- 
fore signed by Mr. Belfleld or Mr. Fogman. It 
does not include any reports that were accepted — 
reports where nothing was the matter. 

The Court: "Mr. Witness, defendant's Exhibit 
A-10, the one preceding this, was that summary 
which you made up from the information gained 
by your perusal of this file and similar files, was 
it not?" 

The Witness: "That is correct." 

The Witness, continuing: Defendant's Exhibit 
A-ll is one of the official files of the Webster- 
Brinkley Co. of the inspection reports and ap- 
provals by the inspectors in charge. 

(At his request, Mr. Stewart was permitted 
further preliminary examination.) 



Thomas R. Bel 'field 69 

The Witness, continuing: As Assistanl T 
urer, I ma my bu find out the operation 

I tin 1 I trtment. Each one of tl 

inspectors when they made a report, made it them- 
selves, and they signed that report rejected or ap- 
proved, and that was turned in each day. That 
recapitulation is made from that record. The 
her wrote this from the report turned in 
by the ins] r. Because it had to be copied to go 
to different departments, that became the official 
one. at record merely means that Mr. Belfield 

signed a typewritten report as Chief Inspector. It 
doesn't mean that lie made the inspection or re- 
checked the inspection. It meant that the Chief 
Inspector had to countersign all the forms that 
showed rejections. My understanding w T as that in 
numerous cases, it was Mr. Belfield 's job to go out 
to the shop to check and make sure that it was cor- 
rect. My understanding from all that were there 
is that that was his job. I did not see him do it. 
It is not a fact that before he was made Assistant 
Chief he signed the very same type of documents as I 
have in Exhibit A-ll. I do not have those records 
here. Mr. Wallaston was acting head of the In- 
spection Department before Mr. Belfield 's tenure 
of office. 

The Court: "So this is the original so far as 
Mr. Belfield is concerned." 

The Witness, continuing: In going over these 
reports, I did not find during this period of time 
any of these reports on which Mr. Belfield was 
listed as the man who made the original inspection. 



70 Webster-BrinMey Co. vs. 

I did not find during all of that period of time any 
of those reports where the approval was signed by 
anybody except Mr. Fogman or Mr. Belfield. 



THOMAS R. BELFIELD 

recalled by the defendant, testified as follows: 

Q. "Mr. Belfield, calling your attention to de- 
fendant's Exhibit A-ll and to the place on there 
were the signature is to be found, or the signature 
of Mr. Fogman, can you tell the Court when the 
signatures were placed thereon?" 

A. "That was done the first thing in the 
morning. ' ' 

Q. "Of each day during the time of your em- 
ployment ? A. Yes." 

The Court: "That answers the Court. Was it 
a part of your daily work?" 

The Witness: "Not necessarily. I w T as gone out 
of the plant, oh, lots of times — gone for two, three 
or four days at a time, on other jobs on the outside." 

The Court: "If you were there, was it or was it 
not a part of your daily work?" 

The Witness: "Yes." 

The Court: "The objections are overruled. De- 
fendant's Exhibit A-ll is now admitted. For the 
convenience of the Court and all of those connected 
with the trial, the Court thinks that it is proper to 

ceive in evidence the summary of inspection re- 
ports in order to avoid the necessity of examining 
each inspection report separately. If it is contended 



Thomas R. Bel-field 71 

by plaintiff's counsel that all of the original inspec- 
tion reports of which defendant's Exhibit A-10 is 
a summary have not yet been brought into court for 
inspection by plaintiff's counsel, the Court will hear 
you further." 

Mr. Stewart: "I assume, your Honor, that this 
tabulation made by Mr. Washington — that he testi- 
fied personally he made it from the files — on that 
testimony I am not going to insist that I examine 
them as to the correctness of it. If the exhibit is 
proper, I won't raise that ground. 



HERBERT R. WASHINGTON 

continuing, testified : 

The Court: "Mr. Washington, I know you testi- 
fied at some length about it last night, but what is 
the fact about whether or not you have brought all 
of the original inspection reports, of the character 
like those contained in defendant's Exhibit A-ll, 
into court and are now present in court available 
for the inspection of all who might wish to inspect 
them?" 

The Witness: "The two cases there contain all 
of this type of inspection rejjort from a little before 
November 16, 1944 until a little after May 15, 
1945." 

The Court: "Does your summary of inspection 
reports which is now marked defendant's Exhibit 
A-10 contain in it any information not included in 
these original reports which are here now in court 
in two files?" 

The Witness: "It does not." 



72 W ebster-Brinkley Co. vs. 

urt then admitted in evidence defendant's 
Exhibit A-10 and defendant's Exhibit A-ll. 

The Witness continued: After Mr. Belfield was 
hired, he was paid for a portion of the time on an 
hourly rate. That was during that early period. 
Mr. Beltield continued to be paid upon an hourly 
basis because he had been paid upon an hourly basis 
and because we had had no such position as Assist- 
ant Chief Inspector up until that time, and it was 
the ruling under the Wage Stabilization Regulations 
that you could not change a rate from an hourly 
rate to a monthly rate for a position which had not 
previously existed without application and approval 
of the Salary Stabilization Unit and we therefore 
had to continue to pay Mr. Belfield on his old basis 
until such approval was received. An application 
for such approval was made to the Wage Stabiliza- 
tion Unit and a ruling was subsequently received 
thereon. Defendant's Exhibit A-9 for identification 
is the application and the ruling of the department 
upon the case of Mr. Belfield. I am sure that this 
matter was taken up with Mr. Belfield. In Novem- 
ber and December, 1944, the plant w y as on a 6-day 
basis. That was, I think, because it was mandatory 
under the manpower regulations and the executive 
order of the President. I think the plant was on 
a 48-hour week basis until about August, 1945, ap- 
proximately the end of the period in question here. 
As to the clerical employees, most of them were 
working 44 hours through a permit that had been 
received from the War Manpower Commission for 
clerical employees. 



Thomas R.Bel field 73 

On cross-examination, Mr. Washington testified 
as follows: 1 did not say that the application made 
to the Wages & Hours people was brought to the 
attention of Mr. Belfield. I was Treasurer at one 
time and later made Assistant Treasurer. My salary 
was fixed by the Stablization Unit, but not before 
I went in as Assistant Treasurer, because I was 
Assistant Treasurer before there were any wage 
regulations. 



WARREN D. THACKER 

called as a witness on behalf of the defendant, being 
first duly sworn, testified as follows on direct 
examination: My full name is Warren D. Thacker. 
I reside at Box 687, Route 1, Port Blakely, Bain- 
bridge Island. I was employed by the Webster- 
Brinkley Co. from January 1, 1945, until October 
of that year. I w 7 as employed by the Works Man- 
ager for the initial purpose of organizing the paper 
w T ork and the procedure of the Inspection Depart- 
ment. I had done somewhat similar work for a 
shipping organization in California and for Stand- 
ard Brands of California. The first thing I had to 
do in connection w T ith the job in order to write a 
procedure or go about a thorough and complete 
reorganization of the department which included 
all the paper work, was to find out how it was 
handled, w T here the reports went, w T hat people were 
involved in the department and wiiat each of those 
people did. I not only had to determine what they 
should do but actually what thev did in the line of 



74 W ebster-Brinlxl c ij Co. vs. 

their duty. As a result of that investigation, I pre- 
pared a manual for the department. It was written 
up as the investigation proceeded. Changes weir 
made in it as I went along. When I went into the 
Inspection Department, it was with the idea that 
Mr. Fogman and I would work together on the 
manual and build it up as we continued our investi- 
gation. Mr. Fogman 's very frequent absences made 
it necessary for me to pursue this work with Mr. 
Belfleld. He helped me in outlining the manual. 
Most of the provisions of the manual — in fact, I 
should say all the provisions of the manual — were 
discussed with Tom as the manual was written. This 
manual outlined the duties of the people, of the 
Chief Inspector, his assistant and all of the in- 
spectors in the department. 

The Court: "Did you discuss with him the sal- 
ary or the effect of the Stabilization Unit's action 
concerning salary in classification of position*?'' 

The Witness: "Not in the manual. I discussed 
it with him personally." 

I did not discuss it with him at or about the 
time the matter was being discussed between the 
company and the Stabilization Unit. I did in the 
normal course of our work. I should say it was 
about the first part of February, 1945. I did not 
mean to sa}^ that I discussed with him the effect 
of the Stabilization Committee's action. I discussed 
with him his salary. I was very closelv in touch 
with Mr. Belfleld and his work. For the first six 
weeks of my work in the Inspection Department, 
I was with him almost constantly. Tom went with 



Thomas It. Belfi-eld 75 

me to each of the inspectors, introduced me to 
them. 1 accompanied Tom about the plant for the 

purpose of investigating the duties of these people 
and for the purpose of investigation his duties as 
well. 1 had to know exactly what everyone was 
doing in the plant in order to come up with a sen- 
sible procedure. We had a small inspection office 
there. We were so close together that we actually 
used the same desk. My work and Tom's work were 
both done in the same desk. In the course of the 
preparation of the manual for the other workers, 
I prepared a statement of the duties of other work- 
ers as well. In fact, that was prepared at my home 
in the evening. Tom came home with me and w 7 e 
sat in front of the fireplace. I wrote it out on the 
typewriter and Tom and I discussed each paragraph 
of it as it was written. We worked several evenings 
on it together. I am sure that every part of that 
manual was discussed thoroughly with Tom. He 
was in agreement with me. Many of the things that 
were included as a part of his duties were suggested 
by Tom. They were his ideas of what he should be 
doing or of what he was doing and what should be 
included. I did have occasion to go out with Mr. 
Belfleld on his inspection trips outside of the plant. 
I went with him two or three times. We went over 
to Cunningham Steel. As to the procedure in the 
department so far as original inspections and ap- 
provals were concerned, inspectors were stationed 
throughout the plant at strategic spots where in- 
spection work might be required. Each of these 
inspectors was given a supply of forms which he 



76 Webster-Brinkley Co. vs. 

filled out as he inspected the various lots of parts. 
The inspection, itself, would break itself down into 
perhaps three classes of inspections. There were 
those parts that were outright rejects, those parts 
that were complete acceptances and then there were 
borderline cases. In the case of outright rejection 
where a part obviously could not be worked to 
dimension or it was not to dimension, the inspector 
was entitled to put a rejection tag on it rejecting 
that material. If it was obviously within the limits, 
that inspector was entitled to accept it. If it was 
a borderline case, he had to use his judgment. If it 
was beyond his judgment, he could and did call 
either Tom or Mr. Pogman for a final decision on 
the things so far as they could decide. If it was 
beyond their discretion, they sometimes called in 
other higher employees of the company — the En- 
gineering Department. The original inspector made 
out the reports of the original inspection in his 
own handwriting and had them at his work place 
in the plant. When he handed in his conclusions on 
this inspection report — we called it the pencilled 
copy — he would turn that in to the inspection office 
at 4:00 o'clock in the afternoon. The following 
morning, the pencilled copy of that inspection re- 
port was checked by Mr. Belfield. Those that were 
approved were laid in one pile and those that were 
rejections were laid in another pile. The rejected 
reports would be very carefully read and checked 
by Tom and initialled by him and turned over to 
the girl for typing. The accepted reports went on 
to her and were typed by her without further 



Thomas R.Bel field 77 

comment or signature or checking. As to rework 
orders, we had two kinds of rework orders. There 
was a rework order that might be handled by a 
leadman, for instance, in the assembly, or by an 
inspector, where obviously the part could be re- 
worked and where there was no question in the 
inspector's mind about it and where the part was 
very badly needed. We didn't have time to go 
through the regular procedure. The other type of 
rework w T as determined by the mechanical engineer 
and was handled as a rejection. The decision was 
by the planning engineer as based on the inspector's 
recommendation. I can't recall just how the re- 
work orders were signed. 

Q. "Did Mr. Belfield have anything to do with 
the rework orders'?" 

A. "Yes, because they were a rejection and they 
had to be approved by the Inspection Department. ' : 

Q. "It is a question of what he did, not what 
had to be done." 

A. "He did." 

Q. "Did he actually approve of them?" 
A. "Yes, that is what I mean to say." 
Mr. Belfield 's duties as I found them out to be 
were as follows: I would meet him there in the 
morning at 8:00 o'clock when I came in. Tom was 
almost always there. The first thing Tom would do 
would be to go through the pencilled copies of the 
reports. He also went through the formal copies — 
that is, the typewritten copies that were for general 
distribution — in Mr. Pogman's absence. But o?di- 



73 W ebster-Brinkley Co. vs. 

narily, if Mr. Fogman was there, Tom went over 
the pencilled copies and then made a tour of the 
plant. We w T ould drop into the Warehouse Depart- 
ment, go from there over to assembly, around 
through the machine shop, consult with the various 
inspectors. They very frequently had horderline 
inspection problems that they didn't feel competent 
to decide which were left up to Belfield's judgment 
or to Fogman 's judgment, if he could be reached. 
Mr. Fogman was absent very much of the time. 
He was almost always late from 1 to 3 hours. He 
was away for two or three days at a time when 
he simply wouldn't show up for work. The work 
accumulated. It had to be handled and was handled 
by his assistant. His assistant was required for that 
purpose to step in. The acting chief of the depart- 
ment during Mr. Fogman 's absence w T as Mr. Bel- 
field. The reports were signed by Mr. Belfield if 
Mr. Fogman was not in. After the tour of inspec- 
tion, we would return to the office ordinarily. Tom 
was subject to call throughout the plant. You 
couldn't make a regular routine out of your calls 
throughout the plant. An inspector might call in and 
ask for Tom and ask for him to come and determine 
what was to be done — a borderline rejection. The 
inspectors from outside, Wallaston and Burdge, 
called in regularly. They were outside, away from 
the plant, and were required to use a little better 
judgment and a little more independent judgment 
than the inside inspectors, but still they would ask 
where they should go on their next call occasionally 
and inquire as to what should be done. 



Thomas R. Bel field 79 

Q. "Were those calls directed at all to Mr. 
Belfield?" 

A. "I would say that they were mostly directed 
to Mr. Belfield. It was almost useless for an outside 
inspector to call in for Mr. Fogman because of his 
very frequent absences. I would say most of them 
were directed to Mr. Belfield. As to the number in 
the Inspection Department at that time, there were 
a varying number, I should say 10 or 12 people.' 

Q. "Who supervised their work?" 

A. "Mr. Belfield directly supervised their work. 
The type of work Mr. Fogman as head of the de- 
partment did was slightly — it was with final deci- 
sions, w T ith consultations with the Engineering 
Department, and such things. The direct supervi- 
sion of the people was through Mr. Belfield. He was 
the supervisor." 

Q. "In your trips around with Mr. Belfield, did 
you ever see Mr. Belfield make an original inspec- 
tion?" A. "No, I did not." 

Q. "When you w r ent around to make an inspec- 
tion, what was the purpose and object of the visit 
and what did he actually do? 

A. "Well, he was almost — we were either mak- 
ing the rounds of the Inspection Department em- 
ployees or he was called out directly by an 
inspector because of some indecision on the inspec- 
tor's part." 

Very often he would recheck the work of an 
inspector or he might tell the inspector to go ahead 
and write up a reject on this or he might say, 



80 W ebster-BrinMey Co. vs. 

''This is all right/' inspect it, and the inspector 
would write up his report. I was the representative 
of the works management, Mr. McCarthy. I was 
assigned there for the purpose of supervising the 
work. I was employed by Mr. McCarthy. I was paid 
by the company. He was the Works Manager of the 
Webster-Brinkley Co. He was not the working 
manager employed by a governmental agency. So 
far as Mr. Bel field's duties were concerned, my job 
was to investigate them very thoroughly, first to 
determine what they were, and then to realign them 
as much as possible in order to increase the effi- 
ciency of the department. As to whether I was in 
a position to say whether or not Mr. Belfield kept 
any record of overtime, as I have said, we were 
very intimate so far as our relationship in the 
office was concerned. We used the same desk. We 
w T ere together very constantly, particularly during 
the first part of my work in the Inspection Depart- 
ment. During that time, I did not see any record 
of time kept by Mr. Belfield. I recall that Mr. 
Belfield told me some time — I had been there about 
a month — when he told me he was making within 
$25.00 of as much as the Chief Inspector and that 
he was doing all of the work because of the Chief 
Inspector's absence; there was also, if I may use 
the expression, the normal beefing of employees 
during wartime, especially when long overtime 
hours were in order. I did as much of it, I suppose, 
as Tom did. That was the nature of our discussion. 
He did not express any dissatisfaction with the 
salary that was being paid. As to the connection 



Thomas R. Belfield 81 

between the hours of work which were being 
worked by a leadman in the assembly department or 
one of the original inspectors, there would have to 
be an inspector on duty if there were work being 
done in the assembly department. Those parts had 
to be inspected as progress was made. As long as 
an inspection was being made, there had to be an 
inspector there. I wouldn't say there was any 
definite relationship between the time spent by Mr. 
Belfield in his department and the time spent by 
one of the original inspectors. We had two shifts 
operating there. Mr. Belfield ordinarily worked one 
shift of it. He was not there all of the time that 
inspectors were on duty by any means, wasn't re- 
quired to be, couldn't possibly be. As to my recol- 
lection of any time during this period when Mr. 
Belfield was absent, I recall one time when he was 
late, came in about 10:00. I recall another time 
when he was off for a day. That happened in 
March, I believe. I recall Saturday afternoons 
twice when we left the plant together and spent 
the afternoon together. Aside from that, Tom was 
very regular in his reporting to w T ork. As to the two 
Saturdays, I can recall that one of them was either 
the middle or the latter part of February. Fogman, 
Belfield, another chap and myself went down to a 
restaurant and had dinner and a general discussion 
which lasted the entire afternoon. As to any time 
when he was ill, there was one dav he was ill. That 
I can definitely recall. 

Id cross-examination, Mr. Tracker testified as 
follows: I have never had the title of efficiency 



82 Webster-Brinldey Co. vs. 

expert. I was hired as a representative of the 
Works Manager to reorganize the work of the 
Inspection Department. My employment was based 
on the fact that I had had experience in doing 
similar work and that reorganization was required 
in the Inspection Department. I wanted to get 
greater efficiency there, to get a better alignment of 
responsibilities and duties of the various inspectors 
and an improvement in the flow of paper work 
necessary to the operation of the plant. The manual 
Avas an inspection manual. When I came there, 
I was to make up a manual of the inspection work 
and when I went in there I talked to everyone who 
would listen to me to find out from the inspectors, 
Belfield, Fogman and everyone, general informa- 
tion, and from that general information I sat down 
to make a manual and I worked at that from the 
time that I came there on or around January 1, 
1945, to about April of that year, a period of about 
four months in the Inspection Department. Mr. 
Belfield had been Assistant Chief Inspector prior 
to the time I came th< re and was after I left. Twice 
Tom and I, rather than working at the plant, Tom 
came to my house. We had dinner together at my 
house. We worked at my house that night. Several 
times we worked at the plant. 

Q. "Mr. Thacker, these pencilled reports that 
came in in pencil were handed in each day. The 
following day Mr. Belfield sorted the OK's from the 
rejections and looked at the blanks f <> see if they 
were all filled and turned them over for writing, 
isn't that right?" 



Thomas R. Bel field 83 

A. "No, that is not right." 

Q. 4k I)o you claim that Mr. Belfield took the 
rejected reports, went out into the shop, miked 
those same jobs again to see if they were light 
or wrong, before he did anything'?" 

A. "That might occasionally happen, but very 
rarely. The normal course of things was for Tom 
to check the reports, approve them as to being 
correct or not correct. On these reports in many 
cases, the actual dimensions themselves that were 
at fault, were mentioned. Tom's duty, there, was to 
determine that the inspector was right in re- 
jecting." 

Q. "He had to rely upon that written report 
and the integrity of the inspector?" 

A. "Yes, except in cases where the difference 
might be very slight, Tom might, if the part were 
very badly required, go out and reinspect it 
himself." 

I said that Mr. Belfield never made an original 
inspection at any time while I was with him. It 
is not a fact that when I made these rounds in the 
morning he went around to see where they were 
behind and he was most needed and started in and 
did the same inspection work that the original in- 
spectors were doing on gears and winches. I was 
not out with him every hour of the day, but every 
hour of the day I was with him he did not make an 
original inspection. I was with him in the office. 
As to when I went back to my office, T would say 
that varied very, very widely. I would say there 



84 Webster-Brinldey Co. vs. 

were occasional days when I spent the whole day 
with Tom and we even had lunch together. There 
were other days when I spent one, two, three or 
sometimes five hours. I want to say that when I 
was walking around with him, he wasn't doing in- 
specting. If he went back into the office after it 
was 5:00 o'clock in the evening or after that time, 
I don't know what he did, and when he went on an 
outside job I don't know what he did there, except 
when I accompanied him. I don't pretend to say 
to the court how T many hours he worked at inspec- 
tion work other than those w T hen I accompanied him. 
On redirect examination, Mr. Thacker testified: 
In my investigation of the work being done by him, 
I did discuss with him the amount of original in- 
spection work that he actually did. Those points 
naturally came up because it had to be determined 
who was to do what work in the department. Tom 
had a dislike for paper work. He didn't like to do 
that kind of work. He liked to be out circulating 
in the plant. Tom never at any time w r hen I saw 
him or was with him ever went to any inspection 
spot in the plant and stationed himself there for the 
purpose of inspecting parts that had not already 
been inspected by some other inspector and were 
not in doubt. He never reported to me that he w r as 
spending a large part of his time in original in- 
spections. I do know personally of conferences in 
which he participated. I know of conferences of 
Pogman and Shadix and Tom in the inspection of- 
fice. I sat in on some of them. I know of the fact 
that he had conferences among the inspectors pri- 



Thomas R. Belfield 85 

marily, that is, he might meet with one or two 
in- ix regarding some particular pari that was 

a borderline case. Someone had to decide those 
points and it was Mr. Belfield 's duty to determine 
— either the fact that they were usable or that they 
must he passed on to someone of greater authority 
to determine whether they could be used or not. 

On recross-examination, Mr. Thacker testified: 
Those conferences were never called by me. I had 
no authority to call such a conference. I do not 
mean to say that in such a conference all of the 
heads of the departments were called in with Bel- 
field and discussed the situation. I mean by 
original inspection the first inspection made of the 
part. 



GERALD S. McCARTHY 

called as a witness by the defendant, being first duly 
sworn, testified as follows on direct examination : 

My full name is Gerald S. McCarthy. I reside 
on Mercer Island, Washington. I was the Works 
Manager of the Webster-Brinkley Co. Mr. Belfield 
reported to me through the Chief Inspector. I did 
not hire Mr. Belfield originally, but I approved his 
appointment as Assistant Chief Inspector upon the 
recommendation of Mr. Pogman. I did talk to Mr. 
Belfield about the salary arrangement. At the time 
that the Inspection Department was reorganized, 
Mr. Pogman presented to me an outline of the func- 
tions of the Inspection Department and of the 



86 W chster-BrinMey Co. vs. 

personnel to fulfill these functions. I made an 
analysis of the Chief Inspector's job and the As- 
sistant Chief Inspector's job in relation to other 
jobs in our plant and determined that the salary 
for both jobs should be fixed at certain figures, in the 
c se of Mr. Belfield, $425.00 a month. I then dis- 
cussed with Mr. Washington, who handled our ap- 
plications and the filing of the applications with the 
various governmental agencies, whether such a 
salary could be paid. I then talked both to Mr. 
Belfield and Mr. Fogman and informed them of 
what their salaries would be, informed them that 
such salaries could not be paid until formal applica- 
tion had been made and approval had been received, 
if such approval were ever received. Xo complaint 
was made on the part of either. The hours of work 
were explained as the hours that the plant opera- 
tions normally worked and that the other executive 
and administrative personnel worked, which, at that 
time, was 6 days a week. 

The Court: "Did vou say that vou told Mr. Bel- 
field that the salary which you had approved at 
$425.00 could not be paid until the Salary Stabiliza- 
tion Committee approved it?" 

The Witness: "Yes." 

The Court: "Did he make any objection?" 

The Witness: "No. He wanted to know how 
long thai would be. I told him that was one thing 
I could not answer, that we would make application 

s on as possible." 

Later, I would say at leas! once every Two we< 



Thomas R. Bel field 87 

he spoke to me with reference to the application 
progress thereon. 

he Court: "What would he say, if you recall 
— any one of those every-two-weeks statements?" 

The Witness: "Well, lie would ask me whether 
we had heard anything yet or when he was going 
to be on his salary. ' ' 

The Court : " Every two weeks or so. How many 
times do you recall?" 

The Witness: "Oh, at least a half a dozen. " 

I told him that I would check with Mr. Washing- 
ton and see if there was anything new. I never 
informed him as to any response of the Stabiliza- 
tion Committee until such response came through. 
The response came through and he was granted the 
change. I don't know exactly when the response 
came through, but he was granted the change on 
the 15th of November. I would say the original 
arrangement was made with him the early part of 
September. It took about that long for Fogman 
to come up with an organization chart and submit 
the form and the recommendations to me. When 
the response came through, I informed Mr. Belfield 
that approval had been granted to pay him the 
salary which we had requested. As to the kind of 
work he should do or what was said on that point as 
to the Stabilization Committee's action, I said only 
that he had been approved for the Assistant Chief 
— that the Salary Stabilization Unit had approved 
his salary for the Assistant Chief Inspector's job. 

The Court: "Did the Stabilization Committee 



88 W ebster-Brinkley Co. vs. 

have anything to do with approving or disapproving 
the kind of work that Mr. Belfield did?" 

The Witness: "The application, I believe, out- 
lined the type of work which was covered by the 
Assistant Chief Inspector's job and hence that is 
what they ruled on." 

As to the function of Mr. Belfield in the Inspec- 
tion Department, I heard the testimony of Mr. 
Thacker. I would say that that testimony was cor- 
rect. I held the Chief Inspector responsible for 
the entire activities of the department and in the 
absence of the Chief Inspector, I held the Assistant 
Chief Inspector entirely responsible for the activi- 
ties of the men and the work performed. I never 
attempted to operate that department myself or go 
over Mr. Belfield 's head in dealing w T ith the inspec- 
tors in the department. There w T as only one case 
that can be called to mind, and that is the case in 
which the entire management from Mr. Bannon 
down through the General Manager, the Chief En- 
gineer and myself, together w T ith the Chief Inspector 
and the Assistant Chief Inspector and one inspector 
on the winch line gave definite orders to the in- 
spectors on the winch line wdiich were not com- 
pletely handled through the normal channels of 
authority. In other words, a man in the winch line 
was given definite orders with the knowledge of his 
superiors of what those orders were. I certainly 
couldn't have handled the routine affairs of any of 
the inspectors or all of the inspectors. I am 30 
years old. I got started pretty early. I w T as 27 
when I was made Works manager. As to previous 



Thomas R. Bel field 89 

experience, I am a mechanical engineer and have 
a Master's degree in industrial engineering. I 

worked for the Fisher Body Company in Detroit 
as an engineer. I have worked for the Webstc r- 
Brinkley Co. since February, 1941. I started as 
project engineer. I was promoted to administrative 
engineer and then Production Manager and then 
Works Manager. I came to Tacoma first and 
worked at Tacoma for a plumbing supply company. 
I then moved to Boeing because they were 1 in the 
type of work which I wanted to be in and which I 
had always studied. The Inspection Department 
reported to me together with other departments. I 
was held responsible for quality and performance 
and the Inspection Department as such was respon- 
sible to me for quality and performance. 

The Court: "Did you ever go among the in- 
spectors and observe what they were doing ?" 

The Witness: "Yes, I observed the operations 
throughout the entire plant." 

The Court: "How often did you have occasion 
to observe what the various inspectors were doing?" 

The Witness: "I would say I made a trip 
through the plant probably both morning and after- 
noon every day when possible, which was pretty 
generally." 

I was aware of the trips made by Mr. Belfield to 
the outside plants. As to the purpose of those trips, 
particularly during the days of the winch contract, 
we had a great many parts which went from one 
subcontractor to another until they came into our 
plant and were completed. Castings would go from 



90 Webster-Briiikley Co. vs. 

a foundry to a machine shop and then to a machining 
plant and then for gear cutting. Mr. Belfield would 
Lve occasion to inspect parts which were doubtful 
after coming from a subcontractor's plant. There 
was no reason to bring them into our plant when a 
man could go out to another plant and examine. In 
some instances, he made trips to Western Gear 
AVorks to establish standards which were acceptable 
to our Inspection Department and to our assembly 
line 1 with Western Gear Works. Those parts were 
also inspected by government inspectors. Differ- 
ences of opinion arose between the government in- 
spectors and our inspectors as to the usability of 
parts. When such differences of opinion arose, the 
doubtful parts were discussed. Generally in the 
case of one type of flaw or another — I say flaw, 
rather than tolerances — everyone has talked toler- 
ances. There were three other things which took 
a man who had had wide experience in the ma- 
chinery business for a good many years, such as 
welding, casting trouble. Those were matters of 
judgment much more than tolerances are. Toler- 
ances are obvious to a measurement, but another 
tiling was a matter of judgment. It was necessary 
to discuss between either Belfield or Fogman with 
the Maritime or Navy inspectors as to what w 7 e 
thought we could do to save such a piece if our 
Inspection Department thought it was justifiable 
to save it — that it was a good piece and could 
finally be repaired. As to whom we looked for the 
answer to that question, Fogman or Belfield, it 
depended upon circumstance^. We had numerous 



Thomas R. Bel-field 91 

nferences a1 which the top executives and M . 
Belfield and Mr. Pogman — either one or the other 
or both — were present in connection with the winch 

contract because of some disagreements or differ- 
ence of opinion with the Maritime Commission 
inspectors as to certain standards which made the 
winches acceptable. These conferences were called 
at various times to determine the exact standards 
which our company felt were acceptable winches. 
I don't remember the exact number of conferences. 
They were for the purpose of setting the standards 
through which our Inspection Department was then 
to carry out as the standard. Inasmuch as this 
spread throughout the various parts of the plant 
and into the plants of our subcontractors, it was 
necessary that the heads of the departments be 
thoroughly familiar with the standards. The Works 
Inspections Manager was under me. I know the 
authority which Mr. Fogman as head of the depart- 
ment and Mr. Belfield as his assistant had. As to 
their authority with reference to hiring and firing 
of employees, Mr. Fogman had the right to hire 
and fire any employee in the Inspection Depart- 
ment. In most cases, most department heads, before 
they would hire or fire — particularly in the case of 
firing, would generally check with their superior to 
see whether there was another place in the organiza- 
tion where that person might be used — something 
of that nature. But Mr. Fogman 's recommenda- 
tions would certainly be adhered to. As to the 
authority of Mr. Belfield in that regard, I would 
sav that he was not allowed to hire or fire, but that 



92 Webster-Brinhley Co. vs. 

his recommendations were to be acted upon. Mr. 
Fogman was very irregular in attendance. I have 
no records to substantiate that, but he was very 
irregular. There were two forms of his absences, 
one, late arrival, and the other, complete absence 
from duty due to his health, according to his state- 
ments. It was his statement that his health was 
poor. I definitely know that he was absent. During 
his absence, Mr. Belfield was held responsible for 
the activities of the department. Mr. Belfield 's 
testimony that in his absence I was the head of the 
department is not correct. I could not possibly 
have supervised the other activities in the plant, 
supervised the men, made the decisions that w 7 ere 
necessary and allocated the men to their duties in 
the day to day operation of that department. Mr. 
Belfield did that work. As to the assignment of 
the work to the inspectors in the Inspection Depart- 
ment, when Mr. Fogman was there, in general he 
took over the allocation of the work in the machine 
shop. Mr. Belfield took care of the allocations in 
the assembly departments and on the outside. In 
Mr. Fogman's absence, Mr. Belfield took care of 
all of the assignments. It w T as quite often necessary 
for Mr. Belfield or Mr. Fogman to reinspect parts 
for any one of a number of causes. The purpose of 
that would be to determine the final satisfactoriness 
based upon their knowledge and judgment or to 
ifer the case, if it seemed questionable to them, 
perhaps to the Engineering Department or perhaps 
to me for final decision. As to whether T know of 
my <>wn knowledge of any original inspection having 



Thomas R. Belfield 93 

been made by Mr. Belfield during' this period i E 
time when he was Assistant Chief [nspector, T 
distinctly remember in the case of the winch con- 
tract — when I suppose you can describe it as orig- 
inal inspection — when following some of these 
conference's a number of us, including Mr. Fogman 
and Mr. Forsythe, went out and inspected gears 
for the first time in measuring them for dimensions 
particularly but for their physical structure and 
that would be the first time they were looked at. 
I can at various times remember Mr. Fogman doing 
that and others — Mr. Fogman, myself and others. 
I would say that that was ordinarily referred to 
as an original inspection. It was not the complete 
inspection of the part but it was part of the original 
inspection. As to whether Mr. Fogman or Mr. 
Belfield did that, on many occasions, that was not 
a part of the routine of their jobs. As to the num- 
ber of contacts I had with Mr. Belfield in his work 
there as Assistant Chief in the Inspection Depart- 
ment, that occurred at least several times a day 
personally, and anywhere from three to four times 
a day by telephone or intercommunicating system. 
The personal contacts during the day would vary 
in time, depending upon the circumstances and the 
situation. That close contract continued during the 
whole time of his employment as Assistant Chief 
Inspector. When I saw him, sometimes I would 
see him in the office, sometimes in the plant, and 
sometimes in my office. Those contacts gave me 
a chance to see what he was doing in connection 
with his job and afforded me a basis of judging 



94 Webster-Brinkley Co. vs. 

how he was occupied. As to an estimate of the 
amount of time he spent in original inspection work 
such as the other inspectors were doing, it was very 
little. In my opinion I would say it was not 

over 5%. 

On cross-examination, Mr. McCarthy testified: I 
was employed at Boeing before I went to the 
Webster-Brinkley plant, for three months. Before 
that time, I worked in Tacoma for a firm there. 
At Boeing I was in the tooling department. I 
graduated from the University in 1937. Prior to 
becoming Works Manager, I had had experience 
in that type of work at the Webster-Brinkley Co. 
and in Detroit. I had never supervised that many 
people before. I reorganized the Inspection De- 
partment or requested its reorganization in August. 
I requested it first of the management, stating that 
the present organization was not satisfactory, that 
I had anoher man lined up for the Chief Inspector's 
job and that I wished to put him on the job. That 
was Mr. Fogman. Some considerable time later, I 
hired Mr. Thacker. The reorganization was begun 
around August. I hired Mr. Thacker in January. 
As to his duties, both Mr. Belfield and Mr. Fogman 
were shop men and I w r anted a man on the job who 
was better on the organizational side. In August 
when the department was reorganized, I was the 
Works Manager. As Works Manager, the Produc- 
tion Department reported to me. The shop and 
Assembly departments reported to a plant super- 
intendent who reported to me and the Warehouse 



Thomas R.Bel field 

Department, through the head, a warehouse super- 
mi snt, and the P< rs anel Department, also 

reported to me. There were six people so reporting. 
I would say that under the various departmental 
heads that were under each of those, there were 
probably a total of from 350 to 500 people. I w; 
responsible for the smooth running of that organi- 
zation through those heads. That was my job. I 
spent my day on that type 1 of work. As to the ti; 
I could devote to the Inspection Department at that 
particular time, it was an extremely important 
department and much more of my time was devoted 
to it than to other departments. There were several 
reasons for that. First of all, because of the critical 
nature of the jobs we were faced with, and also 
because the Chief Inspector was absent some of the 
time and I had to watch Tom to make sure he was 
getting everything lined up all right. I picked Mr. 
Fogman for Chief Inspector. Mr. Fogman recom- 
mended Mr. Belfield to help him. I knew about 
Mr. Belfield. I knew he was inspector in the de- 
partment. I knew quite a bit about him. Mr. 
Fogman recommended him to me. I did testify 
this morning that I discussed a salary arrangement 
with Mr. Belfield. That was about the time that 
Mr. Fogman presented the outline of the organiza- 
tion of the department to me, I w T ould say the latter 
part of August about. I talked to Mr. Belfield in 
my office. The exact phrasing would be a little 
hard to recall but as I remember it, he was told 
that the recommendation made by Mr. Fogman to 
appoint him as Assistant Chief Inspector had been 



96 W ebster-Brinhley Co. vs. 

approved by me and by the Operating Committee — 
which was necessary, and that he would be placed on 
a salary basis instead of the hourly basis which he 
had been on. I think I told him we were giving 
him a promotion. I would say that pretty generally 
anyone who has been on an hourly basis definitely 
feels it is a promotion when it is changed to a 
salary. 

Q. "Do you mean that a man who had an income 
of $450.00 a month as wages and overtime and he 
is given $425.00 in salary, he is promoted — because 
he has a title? It that correct?" 

A. ""Well to my way of thinking it is.' : 

Q. "Well, Mr. McCarthy, to refresh your recol- 
lection, isn't this a fact that you never discussed 
with Mr. Belfield any contract until after Mr. Bel- 
field came to your office and told you that he was 
not making the money that he should be making 
and wanted to know what you were going to do 
about overtime on the salary he was then drawing, 
sometime about January, 1945? Is that correct 
or not?" 

A. "No, I don't remember that." 

Q. "Do you recall that he came to you a second 
time and he was angry and he told you that you 
were going to have to do something about his over- 
time and you told him to take it up with Fogman, 
did you do that?" 

A. "No. I remember him being in anger several 

times but thai was about other tilings." 



Thomas R. Belfi eld 97 

( t ). "You never talked to him about overtime 

at all?" 

A. "I don't believe so." 

( L >. "You know, Mr. McCarthy, whether he did 
or didn't, did he or did he not?" 
A. "No, I don't think so." 

As to whether he wrote out his resignation and 
sent it through to my office, I think he might have 
offered a resignation when he was trying to leave 
the company when Mr. Fogman was not there. As 
to why he was tiying to leave the company, it would 
take quite a long time to explain. I think part of 
it was because — I think it has been earlier testified 
to on the stand, that he felt he was performing all 
the duties of the Chief Inspector and should have 
had the Chief Inspector's job and the Chief In- 
spector's salary, and the Chief Inspector was not 
there. I think that w 7 as one of his primary com- 
plaints. He never complained to me that he was 
putting in hours of overtime and was not paid for 
it. He complained that he was putting in hours of 
overtime but I don't remember him complaining 
about the overtime. He understood w 7 hen he took 
the job that it was on a fixed salary. 

Q. "You had that understanding with him?" 



A 

Q 

A 

Q 

A 

Q 



"I know I did." 

"You told him what his salary would be?" 

"That is correct." 

"And he w T as happy to take it, was he?" 

"Yes, I believe he was." 

"Did he say he was?" 



98 Webster-Brinkley Co. vs. 

A. "He didn't express himself as being un- 
happy." 

As to whether he agreed to anything, he accepted 
the job and went to work on it. I talked with Mr. 
Belfield about his salary between August and No- 
vember 15, 1944. I told the court this morning that 
he talked to me about it about every two weeks. As 
to why he talked to me about it, he wanted to know 
whether it was being approved or not. He wanted 
to know because he wanted to know if he was going 
to get a flat salary or not. As to whether he wanted 
to know if he was going to get less money that he 
was already getting, I don't remember that it was 
phrased in that w r ay. I don't remember any dis- 
cussion with Mr. Fogman about Mr. Belfield 's com- 
plaining about any salary and overtime. As to 
whether Mr. Fogman told him that he would not 
have to work over 40 hours a week if he took this 
salary of $425.00 a month, such a statement w T as 
never made to me. As to whether an executive had 
to get a permit to leave the plant, I think there 
were many people who were interdepartment heads 
or assistant department heads who had to get a 
permit to leave the plant. I don't believe that Mr. 
Fogman did. As to whether Mr. Belfield did when 
he was Assistant Chief Inspector, I don't know. 
I know as a regular outside inspector he did. As 
to who was in charge of the inspection when both 
Mr. Fogman and Mr. Belfield were not there, Mr. 
Belfield was there most of the time. I would say 
generally that he made no trips out of town unless 
it was so arranged that Mr. Fogman definitely 



Thomas R.Bel field 99 

would be there. I can't remember that they wert 
both gone at the same time. As to the time I was 
ever in the Inspection Department in one day, I 
have been in the Inspection Department or inspec- 
tion areas of the plant with one of the production 
people, Fogman, Belneld, an engineer, as many as 
six hours on some days. As to what percentage 
of time in a month I was actually present in there, 
the Inspection Department was in several different 
as in the plant. The office was in one place but 
tli ere were areas wis ere there was an inspection area 
and a warehouse area in addition. As to the per- 
centage of time which I spent in the area of the 
inspection departments, I would say 25% or a little 
more. I know Mr. Wallaston. He w r as an outside 
inspector at the time. I believe he was at one time 
an inside inspector. He was an assembly inspector. 
As to his authority to sign the inspection sheets 
after they were typewritten, under the procedure, 
the first inspector did not sign the typewritten re- 
ports in general because he worked from a pencilled 
copy which he signed. Generally, because that w r as 
used in the working areas of the plant, it got dirty, 
naturally, from the work done with it so that was 
why the other copies were made from it. As to 
whether Mr. Wallaston ever signed the typewritten 
copies introduced as defendants' Exhibits A-9, 
A-10 or A-ll, which are typewritten sheets made 
up from the pencilled copies, I don't know whether 
he signed them or not. I know he wasn't authorized 
to sign Belfield's name on it. As to whether Mr. 
Fogman may have signed it, he would not have 



100 W ebster-Brinkley Co. vs. 

done it. He might have done it but it would have 
been against orders. 

On redirect examination, Mr. McCarthy testi- 
fied: I told him what the salary was that was being 
applied for. Mr. Belfield wasn't forced to take the 
job as Assistant Chief Inspector. He could have 
still remained as inspector so far as I was con- 
cerned. 



GEORGE GREGSON 

called as a witness for the defendant, being first 
duly sworn, testified as follows on direct examina- 
tion: My name is George Gregson. I reside at 1316 
N. 77th Street, Seattle. I am the General Manager 
of the Webster-Brinkley Co. and have been since 
the spring of 1944. I went with the Webster- 
Brinkley Co. in 1942 as Chief Expediter in charge 
of inside and outside expediting material from out- 
side suppliers both in town and out of town. I then 
later became the Production Manager. From 1941 
through 1945, the gross volume of work done by the 
Webster-Brinkley Co. was in excess of $36,000,000 
and comprised approximately 40 major contracts 
which varied from approximately *1 50.000 to 
sl,000,000. The Webster-Brinkley Co. manufactured 
at that time anchor windlasses, capstans, capstan 
windlasses, steering gears — both steam and steam 
hydraulic and electric hydraulic — and cai 
winches. There were a number of other smaller 
items. Many of those items were being built for 



Thomas R.Bel field 101 

the United States Navy and the Maritime Com- 
mission. The largest proportion of our buxim 
was done with them. We had one or two of the 
larger contracts with the Army. That work was 
directly connected with the war. It was all war 
work. It was equipment For both vessels in the 
Maritime service and vessels in the United States 
Navy. In my position as General Manager of the 
plant, Mr. McCarthy was my Works Manager. I 
had very definite opportunity to observe Mr. Mc- 
Carthy's work as Works Manager. Mr. McCarthy 
is extremely efficient and has that almost unpur- 
chasable asset of drive. He has the prime ability 
which many of those with whom he came in contact 
objected to as hot headedness but which actually 
got the material built. The work at that time was 
being done under the most extreme pressure. I 
would say that there was never a week — certainly 
never a week and often three or four times a day, that 
we were pressed from either one division of the Navy 
or the Maritime Commission, and at the time the 
Liberty ships were being built, the pressure was 
heavy. Later, when landing craft was the hottest 
program the United States Navy had, the pressure 
for steering gears for all of the large landing 
craft — and we built all of those — the pressure was 
tremendous. Later, the LST's — that is the landing 
ship tanks — on which w T e built all of the wildlasses, 
this pressure was terrific. Later came the corvettes 
with a steam steering gear. We designed the steam 
steering gear and I am told it is the only steam 
hydraulic steering gear built in the United Stat 



102 Webster-Brinkley Co. vs. 

for the U. S. Navy. That program was under fire. 
At the time our Navy discovered that the Canadian 
Navy was able to convoy across the North Atlantic 
with corvettes, our Navy jumped to build 100 of 
those. We undertook the job, under extreme pres- 
sure through the Maritime Commission, to build the 
steering gears, and supplied them to the Navy. As 
to whether during that period of time the executive 
and administrative officers of the company worked 
more than the ordinary hours, they certainly did. 
I would like to say that the Webster-Brinkley Co. 
organization was an organization that grew. The 
expression that it "grew like Topsy" probably 
describes it. The vast majority of the executives, 
the administrative officers, the second in command, 
did put in an enormous amount of time. I was 
acquainted with the status on which the executive 
and administrative officers were hired so Par as any 
given amount of time per week was concerned. 
I know the basis upon which Mr. Belfield — I per- 
sonally knew the basis upon which Mr. Belfield was 
hired. I have this personal knowledge of the situa- 
tion. The Webster-Brinkley Co. is operated under 
the direct supervision of the President of the com- 
pany through an Operating Committee. The Works 
Manager was one member, the Treasurer of the 
company was a member, and the Vice President 
was a member. Only in cases where there might 
be a deadlock was it necessary for the President 
to serve. But all matters that pertained to tlie 
appointment of people to supervisory positions 
where it was necessarv to clear through the Salary 



Thomas R. Bdfield 103 

Stabilization Unit, they came before the Operating 
Committee with recommendations from their su- 
periors and with a back-up. I was familiar with the 
hiring of the executive and administrative officials 
of the company during that period of time. I was 
also familiar with those cases which w T ere trans- 
fers — if they were transfers within the organization 
from one department to another, which gave a lead- 
man a promotion or gave a stright machinist in the 
shop a promotion. Those matters all came before 
the Operating Committee. They were all cleared. 
As to whether any of the executive or administra- 
tive officers were ever hired for a definite number 
of hours per week, I am quite sure that they were 
not, certainly not to my knowledge. As to whether 
they were hired on all occasions to do a definite 
job irrespective of time, they were. They were 
hired to do a job. As to whether I know anything 
personally about the case of Mr. Belfield, I know 
considerable. I know of my own personal knowledge 
what the nature of his services was. I am certainly 
acquainted with the nature of his services. In the 
management of any organization, whether it be 
Webster-Brinklev Co. or a smaller or a larger or- 
ganization or manufacturing business, there are two 
\i-ry vital spots — outside altogether of the actual 
operating end of the business. In other words, your 
machine shop must operate efficiently or as effi- 
ciently as it can operate. The two departments to 
which I have reference, Inspection and Cost Ac- 
counting, are two of the most important depart- 
ments in the plant to management. I know what Mr. 



104 W ebster-Brinldey Co. vs. 

Belfield 's work was. He was responsible for the 
operation of the Inspection Department in the 
absence of his superior, Mr. Fogman. I have seen 
Mr. Belfield at his work. I spoke with him often. 
As to contacts with him, they were not often. On 
one particular occasion, I had a very close contact 
with him. It was in March, 1945. We were in trouble 
on this winch that has been mentioned. The Mari- 
time Commission took the position that the stand- 
ards being set by our Inspection Department were 
not high enough. It was a very serious matter. It 
could have been most ciitical and it almost came 
to that position, and on at least two occasions, Mr. 
Belfield was present at conferences in Mr. Ban- 
nan's office, conferences called at my sugges+i- . 
and Mr. Belfield and Mr. Fogman were both 
present. One was March 2 and one was March 5 of 
1945. Mr. Belfield was there with Mr. Fogman to 
advise management and the President of the com- 
pany as to the position Inspection took as against 
the charges made by the Maritime Commission in- 
spection department. I recall very well when Mr. 
Belfield first made any claim for overtime. I don't 
remember the exact date. It was one day I was in 
Mr. Washington's office and the telephone operator 
found me there. Mr. Belfield called me by telephone 
and told me that he had decided he was going to 
institute suit against the Webster-Brinkley Co. 
I said, "I am very much surprised." That was 
considerably after he had left the Webster-Brinklry 
Co. He said he was employed at the Western Gear 
Works. That was the first knowledge that I had of 



Thomas E. Bel field 105 

any claim by Mr. Belfield for any overtime against 
the Webster-Brinkley Co. He called me up himself. 
That was the first time that I had ever heard of 
any such thing. 

On cross-examination, Mr. Gregson testified: As 
to whether we lost money on the winch contract, I 
do not know the exact answer. It was very, very 
close to a break-even contract. The Cost Accounting 
Department brought in figures to me, through Mr. 
Wiley, which showed that we were losing money 
on the first few ship sets on the winch contract and 
the loss was quite sharp and it was very upsetting, 
that is, the possible loss w 7 as quite sharp and up- 
setting. We proceeded to take steps to reduce that 
loss by going to the Maritime Commission. We did, 
on the basis of the work presented by our Account- 
ing Department, achieve a negotiating adjustment 
to the contract. I think it still left the winch con- 
tract in a loss position. When, as General Manager, 
I found out that this was a losing venture, I had 
to do two things. I had to find out why the costs 
were in excess of the estimate. I set about to do 
that. As to whether we could do that by reorgani- 
zation or reduction of salaries, w T e couldn't reduce 
salaries. We could not reduce men. As to whether 
we could designate a man as manager and say, " You 
are now an inspector or an officer and we are now 
going to give you a salary," that had nothing to 
do with the appointment of Belfield to his position. 
We couldn't do that. You couldn't do that because 
the position had to be established in order to bolster 
the Inspection Department and that was one of my 



106 Webster-Brinkley Co. vs. 

most severe headaches. That was one of the spots 
where I was after Mr. McCarthy continually. There 
is no question about the fact that we put Belfield 
in to assist Fogman because of the fact that Mr. 
McCarthy said, "Well, this will take care of this 
inspection trouble." As to whether, when the things 
won't pass inspection the trouble is in the manufac- 
turing end, I would say not in this case. When 
the winch contract was on, our biggest headache 
was over supplies. It was material supplied by 
foundries and other outside plants that caused us 
our biggest headache. 

On redirect examination, the witness testified: 
Mr. Belfield was not under any compulsion to take 
the job as Assistant Chief Inspector. 

On recross-examination, the witness testified: As 
to whether I know as a matter of fact that Mr. 
Belfield attempted to transfer out of being Assist- 
ant Chief Inspector to an outside inspector and 
that the company refused to let him do that, I don 't 
know. I certainly don't know that. I would like to 
say in direct reply that Belfield was considered a 
good enough workman that I am quite positive if 
Belfield had expressed a desire to remain an outside 
inspector, there never would have been pressure 
put on him. I am not just assuming that. I knew 
the organization quite well. I lived with it. I don't 
know whether Mr. Belfield ever protested his 
appointment to Mr. McCarthy. If he wanted to 
leave, I had no knowledge of it. I did not know 



Thomas R. Bel-field 107 

that he gol a transfer through the Personnel De- 
partment to another company. 



THOMAS R. BELFIELD 

recalled as a witness on behalf of the plaintiff in 
rebuttal, testified on direct examination: I did not 
have any conversation with Mr. McCarthy in 
August or September, 1944, relative to going on a 
salary basis. I did not between the time that I 
was put in as Assistant Chief Inspector up until 
after T was on a salary talk to Mr. McCarthy about 
the salary. After I went on a salary, I think I 
talked to Mr. McCarthy about my salary, if I 
remember. The first time he referred me back to 
Mr. Fogman. 

Q. "Did you discuss that you had overtime 
coming?" A. "Yes." 

The Court: "With whom was that?" 

The Witness: "With Mr. Fogman. the Chief 
Inspector." 

The Court: "I know — but whom did you inform 
that you had an overtime claim?" 

The Witness: "I never said I had an overtime 
claim." 

The Court: "Who were you talking to when 
you said anything about overtime?" 

The Witness: "Mr. McCarthy." 

I discussed the fact that I was working over- 
time — long hours. On both occasions, there wasn't 
very much said. The first time I seen him about 



108 Webster-Brinkley Co. vs. 

it, he referred me back to Mr. Fogman which in 
most cases he done. That was shortly after I went 
on a salary along about the first of the year some 
time. As to the second time and what was said, 
we both got a little mad, I think, but he still 
referred me back to Mr. Fogman. 

The Court: "It is too bad you can't answer 
the question. It would save a great deal of time." 

Q. (By Mr. Stewart): "Mr. Belfield, the 
Court wants to know if you discussed overtime with 
Mr. McCarthy." 

A. "Yes." 

Q. "What did you say to him?" 

A. "Well, I told him that I w r as putting in 
quite a bit of overtime — I didn't like it, I told 
him. He referred me back to see Mr. Fogman 
about it." 

Q. "About the overtime?" 

A. "That is right." 

I attempted to get out of the department. I sent 
him a written resignation from the Webster- 
Brinkley Co. through the interoffice mail. It was 
sent back by Mr. Fogman. It was rejected. Mr. 
Fogman was present in the course of the day's 
work, as they came and went, I would say 80%. 
There would be days that he wouldn't come in 
until 9:00 o'clock or 10:00 o'clock and then there 
would be other days that 

The Court: "Did you, yourself, know of any 
reason for that from your observation of him?" 

The Witness: "Outside of being lazy or not 



Thomas B.Bel field 109 

able to get up or something like that. He never was 
actually sick or anything that I could see." 

Plaintiff's Exhibit 6 is the inspection report. 
It was made up in the inspection office and typed by 
the girl. I examined that particular exhibit and find 
various pages in it carrying initials of "TB. V The 
initials tk TB" are my initials on the first page. 

Q. kk Will you turn to those and state whether 
or not there are initials on there, *TB' that are not 
your writing." 

The Court: "Do you mean those where there is 
a tab marking the place in the file?" 

Mr. Stewart: "Yes." 

Q. (By Mr. Stewart): "Where there are tabs 
and where it is rejected and whether there are 
figures there and whether they are yours." 

A. "Here is a part rejected by the shop and 
signed ' Rejection' and initialled 'TB' and it isn't 
mine." 

That is not my signature. It is dated 12/27/44. As 
to another one, here it is another rejected report 
coming from the shop. It is signed "Argetsinger" 
and initialled by someone other than myself with 
a "TB." 

Q. "You may examine all of them and tell us 
of any in the book that are not yours, if there are 
more." 

The Court: ''There are several places marked 
with tabs." 

Q. (By Mr. Stewart): "Look at those a : 
count them." 



110 Webster-Brinkley Co. vs. 

A. "Most of them are initialled off by the girl 
here. ' ' 

Q. "No, just the ones that are 'TB', Mr. Bel- 
field, whether it is your signature or whether it 
isn't." 

A. "Yes, here is a rejection that is mine.' : 

It is dated 1/3/45. Here is one by Mr. Fogman. 

The Court: "Does it bear the initials <TB'?" 

The Witness: "No." 

The Court: "Then you are not interested in it." 

Here is another inspection report, 12/27/44. It 
is "Prindiville" and is initialled by "TB." That 
isn't mine. Here is another one, "Argetsinger," 
rejected 12/27/44 and initialled "TB." That is 
not mine. Here is one that is made out by Mr. 
Burdge, 12/30/44. That is initialled by me and is 
my signature. Here is another one made out by 
Prindiville, 12/27/44,2 initialled <TB.' That isn't 
mine. Here is another one that is made out by Mr. 
Bayless, 12/28/44. That is initialled "TB" and is 
not mine. Here is another one that is made out 
by Mr. Burdge and initialled "TB." That isn't 
mine, dated 12/27/44. 

The Court: "Do you think all of them that you 
have mentioned there are in 1944 as having the 
initial 'TB' except one which I think you admitted 
was voursT' 

The Witness: "Yes, this was from 1/4/45 back 
to 12/28/44." 

(Plaintiff's Exhibit 6 was admitted in evi- 
dence.) 



Thomas R.Bclficld 111 

I examined the other cases in the court room. 
I -I others which were initialled with my 

initials. 

On cross-examination, the witness te I: As 

to whether I was outside when those were initial le 
I could have been in Portland or any place. As to 
one on 12/28/44 and one 1/3/45, they are my initials. 
I don't know who signed them. I did not authorize 
anybody to sign my initials. As to whether anybody 
was authorized to sign the approvals on those re- 
ports except me and Mr. Pogman, I don't know. 
I don't know what Mr. Fogman had issued in the 
way of orders to that effect. I looked through that 
list. 

Q. "Did you find any report during that period 
where the approval w r as signed by anybody except 
you and Mr. Fogman?" A. "Yes." 

Q. "Come right down and pick that out." 
A. "Those were put on there as my initials but 
I have never signed that." 

Q. "All right, then I will correct it. You didn't 
find any that were not signed by the initials of 
'TB' for you or by Mr. Fogman?" 

A. "There are some in there that ace not even 
signed by anybody." 

Q. "How about rejections?" 

A. "On rejections." 

Q. "Well, there are not very many of thi 
that are not signed, are there?" 

A. "I wouldn't know. I never went thro- 
but just a few." 



112 W ebster-BrinMey Co. vs. 

When I talked to Mr. McCarthy about overtime, 
all 1 did was to complain of the general overtime. 
I was working long hours each day. I didn't demand 
of him any payment for overtime but I wanted 
back off a monthly salary at one time. 

Defendant's Exhibit A-8 and A-9 admitted into 
evidence. Plaintiff's Exhibit 3 admitted in evidence. 
After argument, the Court announced the following 
decision : 

"In my opinion it is a question of fact in respect 
to each of these two plaintiffs, as to whether or 
not they occupied an executive, administrative, or 
some other capacity that is exempt from the Act 
or were wage earners who were covered by the 
Act and protected by its provisions. 

"The Court has listened with a great deal of 
interest and has carefully considered all of the 
evidence adduced, in this case, touching the activi- 
ties of both plaintiffs. 

"As to the Plaintiff Belfield. I have considered 
all that has been testified to and all that has been 
said by counsel on both sides. It seems to me, and 
the Court finds, concludes and decides that Mr. 
Belfield, while occupying a nominal rank in ad- 
vance of the other inspectors, did nothing, in 
reality, different from what they did except to 
sign some inspection reports or to permit his 
initials to be attached or affixed to certain inspec- 
tion reports. Insofar as that was done, in this 
instance, it was a mere clerical performance. 

"Mr. Belfield did not impress the Court that he 



Thomas R. Bel field 113 

had the quality of mind or of ability that calls for 

eat discretion in that process connected with tl 
signing or initialling of his name on those 
Those rieports seemed to the Court, as disclosed by 
the evidence, to have been in themselves something 
of routine which was done pursuant to established 
procedure. They were done, in a large percenta 
of the instances mentioned in the evidence, as a 
matter of routine by some clerical employee or 
typist, who had affixed the initials of Mr. Belfield. 
I believe, of those that were specifically mentioned 
and introduced in evidence, there was only one 
where the initials of Mr. Belfield were affixed by 
Mr. Belfield 's own hand. 

1 c There were a number of instances, as disclosed 
by the evidence, when Mr. Fogman, who was, in 
fact, the head of the Division of Inspection, was 
absent from his post for some hours of the day 
or for the whole of the day or days. The inquiry 
naturally arises, as to who may have been per- 
forming* his duties of supervision during those 
absences. But the Court is not convinced that the 
situation was anything other than one of suspended 
supervision until he got back. From all that the 
Court is able to glean from the testimony, as to 
what Mr. Belfield actually did is concerned. I care- 
fully observed Mr. Bel field's demeanor on the 
siand, his manner of testifying, and all of the other 
measuring sticks by which triers of the fact may 
properly determine the credibility of a witness, and 
I would never be impressed that Mr. Belfield is a 



114 W ebster-Brinhley Co. vs. 

man of such a nature or disposition — even if lie 
had sufficient ability, in fact — to be put in a posi- 
tion of discretion and important supervision. I just 
can't be convinced by the evidence, in this case, 
that, as a matter of fact — he was in such a position 
in this case. 

"It is, therefore, the opinion, finding, conclusion 
and decision of this Court that the plaintiff Bel- 
field was not, in respect to his employment, any- 
thing other than a wage earner, and that he was 
no different, in the capacity of his actual service, 
from the other inspectors, and that — although he 
carried the nominal position of Assistant Chief — 
the character of his services was like that of other 
inspectors, rather than like that of Mr. Fogman, 
who was, in reality, the Chief. 

"I also find that as to him, since the Act does 
apply, that lie was entitled to overtime for all hours 
worked 'luring any one week in excess of forty 
hours, and that the rate of pay was one and a half 
times the regular hourly scale. Of course, the result 
will be obtained by ascertaining the total number 
of hours worked in one week and deducting there- 
from forty hours, and then, on that difference, mul- 
tiplying by one and a half times the regular hourly 

•;le. If he was paid anything in excess of forty 
hours regular scalepay, then he will have to acknowl- 
edge credit for payment for any of the hours over 
forty, to the extent that he was paid in excess of 
forty. ' ' 



Thomas R.Bel field 115 

[Endorsed]: No. 11680. United Stales Circuil 
Court of Appeals for the Ninth Circuit. Webster- 
Brinkley Company, a corporation, Appellant, vs. 
Thomas R. Belfield, Appellee. Transcript of Record. 
Upon Appeal from the District Court of the United 
States for the Western District of Washington, 
Northern Division. 

Filed July 7, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



In the Circuit Court of Appeals of the United States 
for the Ninth Circuit. 



No. 11680 
THOMAS R. BELFIELD, 



Appellee, 



v. 

WEBSER-BRINKLEY, CO., 

a corporation, 

Appellant. 

STATEMENT OF POINTS UPON WHICH 
APPELLANT RELIES AND DESIGNA- 
TION OF PORTION OF THE RECORD 
NECESSARY FOR CONSIDERATION 
THEREOF 

Appellant, Webster-Brinkley Co., relies on this 
appeal upon the following points, to-wit: 

1. The evidence was insufficient to justify I 



1 16 Webster-Brinkley Co. vs. 

court in concluding that Thomas R. Belfield was 
not employed and worked for the Webster-Brinkley 
Co. in an executive or administrative capacity and 
was not exempt from the Federal Fair Labor 
Standards Act but was subject to said act and en- 
titled to overtime under it. 

2. The evidence was also insufficient to justify 
the court in finding that Thomas R. Belfield was 
employed at $425.00 a month upon the basis of forty 
hours of work per week and it was insufficient to 
iustifv any finding by the court that the basis 
of employment was other than $425.00 a month for 
such number of hours per week as the job might 
take or as he might work; in other words, that the 
employment was for no definite but for a fluctuating 
number of hours per week. 

3. The evidence was also insufficient to justify 
the court in finding that Thomas R. Belfield actually 
worked 591 overtime hours or any number of over- 
time hours. 

4. The evidence was insufficient to justify the 
court in adopting the formula it adopted to calcu- 
late the overtime due Thomas R. Belfield, if any, 
and the award to Thomas R. Belfield of the sum of 

$2174.88. 

5. The evidence was also insufficient to justify 
the court in allowing to Thomas R. Belfield an 
additional equal amount of $2174.88 as liquidated 
damages. 

6. The court erred in making and entering its 
findings of fact No. Ill and TV, its conclusion of 



Thomas R.Bel field 117 

Jaw No. II and its judgment against the defendant 
in the sum of $4319.76, together with attorneys' 
fees in the sum of $500.00 and the costs of suit. 

7. Since the decision of the lower court, there 
has been enacted into law the Portal-to-Portal Bill 
of 1947 approved May 14, 1947, which contains 
retroactive provisions applicable to this case. The 
appellant will call the court's attention to that 
statute and, in particular, Sections 9 and 11 thereof, 
and urge the court, if it should not reverse the deci- 
sion of the lower court, to provide that on remand 
to the District Court, that court shall have authority 
to consider any matters presented to it under the 
Portal-to-Portal Act of 1947. 

In fact, the entire record pertaining to the Bel- 
field case and all the exhibits with reference to that 
case, have been forwarded to the Circuit Court of 
Appeals. The testimony has been reduced to nar- 
rative form. The appellant hereby designates the 
entire record which has been forwarded to this 
court, together with all the original exhibits for- 
warded to this court and the narrative statement 
of the oral testimony, as the record which the ap- 
pellant thinks necessary for the consideration of 
the points on which it intends to rely on this 
appeal. 

Dated this 2nd day of July, 1947. 

CATLETT, HARTMAN, 
JARVIS & WILLIAMS, 

/s/ FRED W. CATLETT, 

Attorneys for Webster- 
Brinkley Co., Appellant. 



1 18 W ebster-Brinkley Co. vs. 

[Title of Circuit Court of Appeals and Cause.] 

STIPULATON AND ORDER 
ELIMINATING ORIGINAL EXHIBITS 

It Is Hereby Stipulated by and between Thomas 
R. Belfield, appellee, and Webster-Brinkley Co., a 
corporation, appellant, by their respective counsel, 
that all exhibits admitted in evidence at the trial 
of the above entitled case and designated by stipu- 
lation to be transmitted to the above entitled court 
as part of the records of this cause herein be 
excluded from printing, and the court be and it 
is hereby requested to consider the same in their 
original forms as though set out in the printed 
record. 

Dated at Seattle, Washington, May 19th, 1947. 

CATLETT, HARTMAN, 
JARVIS & WILLIAMS, 
/s/ FRED W. CATLETT, 

Attorney for Appellant. 

/s/ LEO W. STEWART, 

/s/ CHARLES H. HEIGHTON, 

Attorneys for Appellee. 

So Ordered. 

/s/ FRANCIS A. GARRECHT, 

United States Circuit Judge. 

[Endorsed]: Filed July 7, 1947. 



1100 

No. imm 

EN THE 

UNITED STATES 
CIRCUIT COURT OF APPEALS 

FOE THE NINTH CERCUIT 



Webster-Brinkley Company, a corpo- 
ration, 

Appellant, 

vs. 

Thomas R. Belfield, 

Appellee. 



Upon Appeal from the District Court of the 

United States for the Western District 

of Washington, Northern Division 



BRIEF OF APPELLANT 



Catlett, Hartman, Jarvis & Williams 

Attorneys for Appellant. 
1410 Hoge Building, 

Seattle 4, Washington. 00 Jfl 

THI AROUB FRCBB, IIATTlPAI || O /-«..-.»-.. 

«"#»uw I*, O'BRIEN, 

oumc 



No. 11689 

INTHE 

UNITED STATES 
CIRCUIT COURT OF APPEALS 

FOR THE NINTH CIRCUIT 



Webster-Brinkley Company, a corpo- 
ration, 

Appellant, 

vs. 



Thomas R. Belfield, 



Appellee. 



Upon Appeal from the District Court of the 

United States for the Western District 

of Washington, Northern Division 



BRIEF OF APPELLANT 



Catlett, Hartman, Jarvis & Williams 

Attorneys for Appellant. 
1410 Hoge Building, 
Seattle 4, Washington. 



tit 

INDEX 

Page 

Jurisdiction 1 

Statement of the Case 

Specifications of Error 6 

Argument 

TABLE OF CASES 

Alaskan Juneau Goldmining Co. v. Robertson 12 

Lab. Cas. 51,252 (U.S. Sup. Ct., June 16, 1947).. 47 
Ashworth v. E. B. Badger & Sons Co., 63 F. Supp. 

710 17 > 35 

Bender v. Crucible Steel Co. of America, 71 F. 

Supp. 420 38 

Dolan v. Zimmerman, 65 F. Supp. 923 37 

Henmj v. Chemical Construction Co., 11 Lab. Cas. 

63,442 3T 

Lasater v. Hercules Power Co., 13 Lab. Cas. 63,946 

(U.S. Dist. Ct., E.D. Tenn., July 25, 1947) 47 

Lassiter v. Atkinson Co., 13 Lab. Cas. 63,947 (C. 

C.A. 9, July 28, 1947) 47 

Marion v. Lockheed Aircraft Corp., 65 F. Supp. 18 17 
1A9 Madison Ave. Corp. v. Williams & Co., 12 Lab. 

Cas. 51,253 (U.S. Sup. St., June 16, 1947) 47 

STATUTES 

28 U.S. Code, §14(8) 3 

Federal Fair Labor Standards Act, 52 St. 1069, 

29 U.S.C., §216 2, 3, 4, 5, 7 

Judicial Code, §24, as amended, 28 U.S.C., §41 4 

Judicial Code, §128, as amended, 28 U.S.C., §225 (a) 4 

OTHER AUTHORITIES 

Executive Order 9250 10 

9328, Apr. 8, 1943 10 

9381, Sept. 25, 1943 10 

7 Fed. Reg. 8748 11 

8820 12 



IN THE 

UNITED STATES 
CXMCUIT COUMT OE APPEALS 

FOR THE NINTH CIRCUIT 

Webster-Brinkley Company, a corpo- 
ration, 

Appellant, \ No n6g9 

Thomas R. Belfield, 

Appellee. 

Upon Appeal from the District Court of the 

United States for the Western District 

of Washington, Northern Division 



BRIEF OF APPELLANT 



This is a suit for overtime under the Federal Fair 
Labor Standards Act, 52 St. 1069, 29 U.S.C. Sec. 216. 

The complaint merely alleged that Thomas R. Bel- 
field was employed by the defendant as Assistant Chief 
Inspector; that the defendant was engaged in making 
parts for the Maritime and Navy Services of the 
United States and for vessels constructed in connec- 
tion with such Services; that the plaintiff was so em- 
ployed from about November 20, 1944 to and includ- 
ing May 13, 1945, and that during said period he 
worked 591 hours overtime; that his pay per hour 
at the rate of time and a half would be $3.68 per 
hour; that the defendant was indebted to him in the 



(Figures in brackets refer to pages of the Transcript 

of Record) 



2 

sum of $2,174.88; that under Federal statutes he was 
entitled to double the amount of wages earned, or a 
total of $4,349.76. Plaintiff also asked for a reason- 
able attorney's fee of $1,500.00 (2-6). 

The defendant, in its answer (8-11), admitted the 
employment and that it was manufacturing steering 
devices and parts for the Maritime Commission and 
United States Navy. It denied the other allegations 
of the complaint. By way of a separate and affirma- 
tive defense, it alleged that in August, 1944, Webster- 
Brinkley Company commenced the reorganization and 
enlargement of its Inspection Department and on Oc- 
tober 9, 1944, it filed an application to establish the 
proper salary for positions of Chief Inspector and 
Assistant Inspector of its Inspection Department with 
the Salary Stabilization Unit of the Bureau of In- 
ternal Revenue, which, under presidential order gov- 
erning administration of the wage stabilization regu- 
lations, had jurisdiction over salaried employees oc- 
cupying executive, administrative or professional po- 
sitions and receiving salaries of more than $200.00 
per month ; that after investigation and in November, 
1944, the Salary Stabilization Unit approved the ap- 
plication to fix the salary of the plaintiff, Thomas R. 
Belfield, in the position of Assistant Chief Inspector, 
at $425.00 per month and that on November 16, 1944, 
plaintiff, Thomas R. Belfield, entered upon his em- 
ployment as Assistant Chief Inspector at the salary 
fixed; that the position of Assistant Chief Inspector 
was a supervisory position and classifiable as an ex- 
ecutive or administrative position under the regula- 
tions of the Administrator of the Wage and Hour Di- 



8 

vision of the Department of Labor issued pursuant to 
Section 13(a) of the Fair Labor Standards Act en- 
acted June 25, 1938, 29 U.S. Code, Sees. 201 to 219, 
and that plaintiff was therefore exempt from Pro- 
visions 6 and 7 of said Act. 

For a second affirmative defense, defendant alleged, 
in addition to the allegations of the first affirmative 
defense, that Thomas R. Belfield fully understood 
that in the position of Assistant Chief Inspector he 
was acting in an executive or administrative capacity 
and would not be entitled to overtime; that he was 
fully informed of the application to the Stabilization 
Unit and its action thereon, and that he accepted the 
employment with the understanding that he would 
not be paid for overtime, and that he received his 
check semi-monthly in payment for his services, at 
the rate set forth, during the whole period of his em- 
ployment, and that during such period he never claim- 
ed he was entitled to any overtime or asserted that 
his position was a non-exempt position; that because 
of such facts the defendant kept no record of the hours 
worked by Mr. Belfield, as it did not of any of its 
other executive and administrative employees, and 
that Mr. Belfield was estopped to claim he occupied 
a non-exempt position or to claim any overtime in 
connection therewith. 

The Findings of Fact (13) assert that the juris- 
diction of the lower court depended upon Section 
14(8), 28 U.S. Code, and that suit was brought to 
recover compensation pursuant to Section 16(b) of 
the United States Fair Labor Standards Act of 1938. 
It is believed the Findings are erroneous as to the 



statute upon which the jurisdiction of the lower court 
depended. In our judgment it depended upon Judicial 
Code Sec. 128, as amended, 28 U.S.C. Sec. 225(a) 
First, and (d), Sec. 24 Judicial Code, as amended, 
28 U.S.C. Sec. 41, and the Fair Labor Standards 
Act, 52 Statutes 1069, 29 U.S.C. Sec. 216. 

STATEMENT OF THE CASE 

This is a suit by Thomas R. Belfield against the 
Webster-Brinkley Co., a corporation, for alleged over- 
time work performed between November 20, 1944, 
and May 13, 1945. It is admitted that plaintiff was 
employed as Assistant Chief Inspector of the Inspec^ 
tion Department of the company at a salary of 
$425.00 a month without overtime, that he was dur- 
ing this twenty-five week period paid his salary regu- 
larly by check every two weeks, that he made no claim 
for any overtime during his employment and not 
until about eleven months after he quit work for the 
company. The plaintiff claimed, however, that under 
the provisions of Sec. 7 of the Federal Fair Labor 
Standards Act, he was entitled to overtime for all 
time worked in excess of 40 hours a week at the rate 
of one and a half times the regular hourly rate arrived 
at by multiplying the monthly salary by 12 and di- 
viding that, first by 52, and then by 40, and that un- 
der Sec. 16(b) of the Act, the total thus arrived at 
must be doubled as liquidated damages. The plaintiff 
further claimed that between the dates mentioned he 
worked 591 hours of overtime. The defendant con- 
ceded that the plaintiff worked at times more than 
eight hours a day but claimed that he was employed 



as Assistant Chief Inspector on a guaranteed month- 
ly salary, that he was expected to and understood that 
he would be called upon to work at times more than 
eight hours a day without further compensation, that 
he was employed to do a job and on the same basis 
as were all the other executive and administrative 
employees of the defendant. The defendant main- 
tained that the plaintiff's job was classified by it, 
and properly, as an administrative position and that 
it was as such exempt, under Sec. 13(a)(1) of the 
Act, from the provisions of Sec. 7 of the Fair Labor 
Standards Act. It further contended that the plaintiff 
was employed for a fluctuating work week, that the 
defendant did not know and had no way of ascertain- 
ing what hours of overtime (using that word in- 
exactly as meaning more than eight hours a day) the 
plaintiff might have worked, but denied emphatically 
that he ever worked any such amount as 591 hours. 
On the evidence produced by the plaintiff, the defend- 
ant also contended that he had failed to prove the 
performance of any certain amount of overtime work, 
that even if he had, since there was no testimony as 
to the hours he worked in any particular week, it was 
impossible to ascertain his regular rate per hour. On 
the evidence also, it must be admitted that there is 
not a particle of evidence that the employment was for 
a 40-hour week. 

On these issues, the court found in favor of the 
plaintiff in strict accordance with the allegations of 
his complaint and awarded him a judgment in the 
full amount claimed, doubled, and for $500.00 in ad- 
tion as attorney's feets (17). After a motion for a 



new trial (18-20) which was argued and denied (23), 
the defendant appealed to this court (21). 

SPECIFICATIONS OF ERROR 

The court erred in making its Findings of Fact No. 
Ill and No. IV and in entering its Conclusion of Law 
No. II, in the following respects (14-15) (The "Tran- 
script of Record'' is erroneous in that it omits Find- 
ing of Fact III and numbers Finding of Fact IV as 
III) : 

1. In finding that the plaintiff was not exempt from 
the provisions of Sec. 7 of the Federal Fair Labor 
Standards Act but was subject to the provisions of 
Sec. 7 and entitled to overtime under it (14). 

2. In finding that Thomas R. Belfield was employed 
upon the basis of 40 hours of work per week and 
in not finding that the employment was for no spe- 
cific number of hours per week but for a fluctuating 
number of hours (14). 

3. In finding that Thomas R. Belfield actually 
worked 591 overtime hours or any specific number of 
overtime hours (14). 

4. In adopting the formula it adopted to calculate 
the overtime due Thomas R. Belfield, if any, and in 
the award to Thomas R. Belfield of the sum of 
$2,173.70. 

5. In allowing to Thomas R. Belfield an additional 
equal amount of $2,173.70 as liquidated damages (14- 
15). 

6. Since the decision of the lower court, there has 
been enacted into law the Portal-to-Portal Bill of 1947 



approved May 14, 1947. That Act contains retroac- 
tive provisions applicable to this case. Under that 
Act, it is no longer mandatory upon the trial court to 
double the amount of overtime allowed as liquidated 
damages, but if it appears that the employer was act- 
ing in good faith, the court in its" discretion may de- 
cline to award liquidated damages. Appellant believes 
the good faith of the employer in this case is undeni- 
able under the evidence, and that the lower court, if it 
had had any discretion at the time of pronouncing 
judgment, would not have awarded double damages 
and that if it had done so, would have erred, and that 
this court would have set aside such an award as an 
abuse of discretion. 

The above specification of errors is based upon the 
claim of appellant that the evidence was insufficient 
to support any one and all of the foregoing findings 
and conclusions. 

ARGUMENT 

I. 

The primary question in this case is one of classifi- 
cation of employment. Was Thomas R. Belfield em- 
ployed in an executive or administrative position dur- 
ing the period in question? If he was, he was exempt 
from the provisions of Sec. 7 of the Federal Fair 
Labor Standards Act as to overtime. If not, he was 
entitled to payment for such overtime as he could 
prove. Sec. 13(a) of the Federal Fair Labor Stand- 
ards Act reads : 

"The provisions of sections 6 and 7 shall not 
apply with respect to ( 1 ) any employee employed 



8 

in a bona fide executive, administrative, profes- 
sional * * * capacity * * * (as such terms are 
defined and delimited by regulations of the ad- 
ministrator)." 

Under the authority of the latter provision, the Ad- 
ministrator has defined the terms "executive" and 
"administrative" as follows: 

"Executive. — The term 'employee employed 
in a bona fide executive * * * capacity' in sec- 
tion 13(a) (1) of the Act shall mean any em- 
ployee 

(a) whose primary duty consists of the man- 
agement of the establishment in which he is em- 
ployed or of a customarily recognized depart- 
ment or subdivision thereof, and 

(b) who customarily and regularly directs the 
work of other employees therein, and 

(c). who has the authority to hire or fire other 
employees or whose suggestions and recommen- 
dations as to the hiring or firing and as to the 
advancement and promotion or any other change 
of status of other employees will be given par- 
ticular weight, and 

(d) who customarily and regularly exercises 
discretionary powers, and 

(e) who is compensated for his services on a 
salary basis at not less than $30 per week (ex- 
clusive of board, lodging, or other facilities), and 

(f ) whose hours of work of the same nature 
as that performed by non-exempt employees do 
not exceed twenty per cent of the number of 
hours worked in the workweek by the non-exempt 
employees under his direction ; provided that this 
subsection (f ) shall not apply in the case of an 
employee who is in sole charge of an independent 



establishment or a physically separated branch 
establishment. 

"Administrative. — The term 'employee in a 
bona fide * * * administrative * * * capacity' 
in section 13(a)(1) of the Act shall mean any 
employee 

(a) who is compensated for his services on a 
salary or fee basis at a rate of not less than $200 
per month (exclusive of board, lodging, or other 
facilities), and 

(b) (1) who regularly and directly assists an 
employee employed in a bona fide executive or 
administrative capacity (as such terms are de- 
fined in these regulations), where such assist- 
ance is non-manual in nature and requires the 
exercise of discretion and independent judgment; 
or 

(2) who performs under only general supervi- 
sion, responsible non-manual office or field work, 
directly related to management policies or gen- 
eral business operations, along specialized or 
technical lines requiring special training, experi- 
ence, or knowledge, and which requires the exer- 
cise of discretion and independent judgment; or 

(3) whose work involves the execution under 
only general supervision of special non-manual 
assignments and tasks directly related to man- 
agement policies or general business operations 
involving the exercise of discretion and inde- 
pendent judgment; or 

(4) who is engaged in transporting goods or 
passengers for hire and who performs, under 
only general supervision, responsible outside 
work of a specialized or technical nature requir- 
ing special training, experience, or knowledge, 
and whose duties require the exercise of discre- 
tion and independent judgment. 



10 

The burden of proof of establishing the exemption 
is upon the employer, but the burden of proof of es- 
tablishing the overtime is upon the employee. 

Before discussing the evidence in its application to 
the Administrator's definition, brief reference should 
perhaps be made to the salary and wage regulations 
in effect during the time covered in this case. The 
court will doubtless take judicial notice of such mat- 
ters, but in fairness it should be pointed out that in 
October of 1942 Congress passed the wage stabiliza- 
tion law authorizing the President to issue a general 
order stabilizing wages and salaries and to promul- 
gate such regulations as he considered necessary. Pur- 
suant to that regulation, the President did issue ex- 
ecutive order No. 9250, which was subsequently 
amended by executive order No. 9381 on September 
25, 1943. It created an Office of Economic Stabiliza- 
tion and an Economic Stabilization Board with a di- 
rector who served as chairman. Title II, Sec. 1 of the 
order provided that no increase in wage rates should 
be authorized unless notice was filed with the Na- 
tional War Labor Board and unless that Board had 
approved such increase. The National War Labor 
Board was authorized to designate the agency of the 
federal government to carry out the wage policies 
stated in the order. It did so, and among other things, 
provided: "Salaries and wages under this order shall 
include all forms of direct or indirect remuneration 
to an employee or officer for work or personal serv- 
ice performed for an employer or corporation, etc." 

By executive order No. 9328 issued April 8, 1943, 
the President directed the National War Labor Board, 



11 

the Commissioner of Internal Revenue and other 
agencies to "authorize no further increase in wages 
or salaries except such as are clearly necessary to 
correct substandards of living, etc." This was the so- 
called "hold the line" order. Pursuant to the author- 
ity conferred upon him, the Economic Stabilization 
Director did issue extended regulations which may be 
found in 7 Fed. Reg. 8748. These regulations divided 
the authority to control wages from that controlling 
salaries. The jurisdiction of the National War Labor 
Board covered wage payments and covered salary 
payments not in excess of $5,000 per annum where 
such employee in his relations with his employer was 
represented by a duly recognized labor organization 
or where he was not employed in a bona fide execu- 
tive, administrative or professional capacity. The con- 
trol of salaries was placed under the Commissioner of 
Internal Revenue and covered all salaries except those 
previously referred to. The Commissioner of Internal 
Revenue created in his department what was known 
as the Stabilization Unit to handle the control of sal- 
aries. The Stabilization Unit did not have jurisdic- 
tion over wages and did not have jurisdiction over 
salaries under $5,000 if the employee was not em- 
ployed in a bona fide executive, administrative or pro- 
fessional capacity. The National War Labor Board 
entrusted the administration of its portion of the 
wage stabilization program to the Wage, Hour and 
Public Contracts Division of the Department of La- 
bor. This division had no jurisdiction over the sal- 
aries of executives or administrators. 

This difference of jurisdiction is important in this 



12 

case. Mr. Belfield while an inspector was under the 
jurisdiction of the Wage, Hour and Public Contracts 
Division of the Department of Labor. When he was 
appointed Assistant Chief Inspector, he was classified 
by his employer as an executive or administrative em- 
ployee. Consequently, his salary was fixed and con- 
trolled by the Stabilization Unit of the Bureau of 
Internal Revenue. In establishing any new position 
such as that of Assistant Chief Inspector, the Webster- 
Brinkley Co. was compelled to apply to the Stabiliza- 
tion Unit to fix a salary therefor and could not pay 
that salary until approval had been received. In addi- 
tion, it could not change an hourly wage which was 
under the jurisdiction of the Wage, Hour and Public 
Contracts Division of the Department of Labor to a 
monthly salary which was under the jurisdiction of 
the Stabilization Unit of the Bureau of Internal Rev- 
enue until it had received the approval of the Stabili- 
zation Unit to the salary for the position. That is the 
reason why, in Mr. Belfield's case, he was told that 
the change to his salary rate could not take effect un- 
til approval had been secured from the Stabilization 
Unit and why, in the meantime, he had to be paid on 
his old hourly rate basis (72). 

Pursuant to the power conferred upon him, the 
Commissioner of Internal Revenue on October 29, 
1943, 7 Fed. Reg. 8820, issued his regulations govern- 
ing salary administration. His definitions of "execu- 
tive" and "administrative" followed those of the Ad- 
ministrator previously set forth. Sec. 1002.13 of 
those regulations provided that no increase in salary 
should be made by the employer except as provided in 



13 

Sec. 1002.14 without prior approval of such increase 
by the Commissioner, and later in the same section, 
subparagraph 4, it was provided: 

"Payment for overtime will constitute an in- 
crease in salary rate and thus will require the 
approval of the Commissioner unless the cus- 
tomary practice of the employer has been to pay 
for overtime and the rate and scheduled number 
of overtime hours of work have not been 
changed. " 

The Webster-Brinkley Co. was not paying any 
overtime to any of its administrative or executive 
personnel and had never done so. It could not, there- 
fore, after the application and ruling of the Stabiliza- 
tion Unit in Mr. Belfield's case (def. Ex. A-9) have 
paid Mr. Belfield any overtime without violation of 
the regulations of the Commissioner. 

Returning now to a consideration of the facts in 
this case and their application to the Administrator's 
definitions as previously set forth, the evidence is un- 
disputed that Hal Fogman was Chief Inspector of the 
Inspection Department which was a recognized and 
established department of the Webster-Brinkley Co. 
It will hardly be denied that he clearly qualified as 
an executive under the Administrator's definition. 
He was Mr. Belfield's immediate superior. 

Although Mr. Belfield's duties certainly included 
some, and perhaps all, the requirements for an "ex- 
ecutive" position, it is believed that his job as a whole 
is more accurately classified as "administrative." In- 
deed, it may be said with even greater accuracy that 
his job was at least an administrative job under the 



14 

definition of the Administrator. The requirements of 
that classification are (1) A salary of not less than 
$200 a month (Mr. Belfield received $425 a month) ; 
(2) Either one of four other requirements. For our 
purposes, let us take (b) (1), an employee "who regu- 
larly and directly assists an employee in a bona fide 
executive or administrative capacity where such as- 
sistance is nonmanual in nature and requires the ex- 
ercise of discretion and independent judgment." 

With these requirements in mind, what does the 
evidence show the facts to be concerning Mr. Belfield's 
employment? We emphasize the word "employment/ ' 
because we believe the lower court went astray in en- 
deavoring to classify the man instead of the job. The 
lower court said that in its judgment, Mr. Belfield did 
not have the "quality of mind or ability that calls for 
great discretion." That, however, is not the test fixed 
by the statute. During the war period, there were 
thousands of cases where men of perhaps insufficient 
training or capacity were occupying jobs for which 
they were not perfectly fitted. The question was not 
whether Mr. Belfield was fitted for an administrative 
job but whether the job was administrative in char- 
acter under the Administrator's definition. 

What does the evidence establish as to the char- 
acter of this job? Admittedly, Mr. Belfield was As- 
sistant Chief Inspector. The Webster-Brinkley Co. 
was engaged entirely in war work for the Navy and 
Maritime Commission. It manufactured steering 
gears, capstans, windlasses, and, during the period in 
question in this case, was largely engaged in the man- 
ufacture of cargo winches for ships. It built these 



i6 

articles to government specifications and its product 
was subject to final and rigid government inspection. 
It was obviously vital to the very existence of the de- 
fendant that its own Inspection Department function 
efficiently and accurately. 

The Webster-Brinkley Co. Inspection Department 
was a recognized department under and responsible 
to the Works Manager. It consisted of a Chief In- 
spector, Hal Fogman, an Assistant Chief Inspector, 
Tom Belfield, from 10 to 15 inspectors (34), and one 
or two clerical employees. It had a central separate 
office occupied by Fogman, Belfield and the clerical 
employees. The inspectors were posted by assignment 
to various stations or inspection areas in the plant. 
A very large proportion of the defendant's operation 
was assembling parts manufactured elsewhere into 
the complete product. To avoid loss through the trans- 
fer of unsuitable and defective parts, outside inspec- 
tors were placed in or visited these outside suppliers. 
The inspectors carried blueprints prepared by the en- 
gineering Department. The articles being built by 
Webster-Brinkley required great precision in con- 
struction and were being fabricated under the con- 
stant pressure of the war's demands. The inspectors 
had to be machinists and had to have the skill to read 
accurately the blueprints, interpret them, and apply 
them to the parts being produced. The inspector had 
to determine whether the part complied with the speci- 
fications and requirements of the blueprint in its 
measurements and was in every respect satisfactory 
in size and quality. "An assembly inspector/' Mr. Bel- 
field said, "watches these different machines being 



16 

assembled and sees that they are assembled right and 
work free" (33). It is difficult to see how anyone 
could conclude that the performance of such duties 
did not require constantly the exercise of discretion 
and judgment. If the exercise of discretion and judg- 
ment were the only requirement, every one of the in- 
spectors could have been properly classified as ad- 
ministrative. 

But admittedly, Mr. Belfield did more. He was 
Mr. Fogman's "right hand man." There is no doubt 
that Mr. Belfield regularly and directly assisted an 
employee in a bona fide executive capacity. He super- 
vised or assisted in the supervision of from 14 to 16 
persons (34). He assigned the stations or inspection 
areas to all of the inspectors in the assembly plant 
and, in the absence of his chief, Fogman, to all of the 
inspection areas in the whole plant (92). Fogman was 
absent a large part of the time through alleged sick- 
ness. Even Belfield said he was absent about 20 % of 
the time (108). Defendant's Ex. A-10 shows 35 days 
out of 180 when Fogman approved no inspection re- 
ports; this would indicate he was absent for entire 
days 20% of the time. As all witnesses agreed he 
was frequently hours late in arriving at work, his 
total hours absent would greatly exceed 20 % . During 
Fogman's absence, Belfield, as Assistant Chief, was 
the top man in the department. Undoubtedly, Bel- 
field participated in some conferences of executives 
to thresh out difficulties in inspections and to estab- 
lish standards (90). Admittedly, he did review and 
approve many of the first inspections (57). It is evi- 
dent that throughout his testimony he played down 
the importance of his job. Judges dealing with this 



17 

type of case have frequently remarked that this is 

the common attitude of the plaintiff. In Ashworth v. 

Badger, 63 Fed. Supp. 710, for instance, Judge Ford 

of the District Court of Massachusetts said: 

"In this case, there was a tendency on the 
plaintiff's part to 'talk down his job' to avoid the 
exemption. " 

But even the plaintiff, in the course of his testi- 
mony, disclosed important facts, and other testimony 
and undisputable documentary evidence show over- 
whelmingly that Mr. Belfield's job did involve the 
constant exercise of judgment and discretion, and thai 
it was nonmanual in its nature. To be sure, inspection 
does require the use of the hands in making measure- 
ments and in lifting and moving parts for purposes of 
examination, but the manual work, as has been so 
often said by the courts, is incidental to the main job; 
Marion v. Lockheed Aircraft Corp., 65 Fed. Supp. 18. 
It is a necessary prerequisite to the exercise of the 
judgment and discretion, which is the important part 
of the work and the part which justifies the high sal- 
aries paid. 

We have said that Mr. Belfield played down his job. 
It is worth while referring to his testimony in that 
respect. He testified that he did the same work as the 
inspectors under him (37), except for looking over 
the inspection reports which came into his office in 
the morning (39). When asked if it was "manual," 
he said, "Yes, it was inspecting tools" (35). As to the 
reports, he said he had absolutely no independent dis- 
cretionary authority as to them (35), that he merely 
separated the reports that were O.K. from the ones 



18 

that were rejected, and that the rejected ones eventu- 
ally went to Fogman, the Chief Inspector (35) ; that 
"he had the final say-so on all of them"; that the 
sorting of the reports probably took a half an hour to 
one hour in the morning, and that then he went out 
into the plant and worked with the rest of the inspec- 
tors in the assembly line, in the shop and in the ware- 
house, that he spent 90% of his day in doing "the 
work of the other regular inspectors in the shop" 
(36), that there was no difference between the work 
he did as inspector prior to reorganization and what 
he did afterwards. "It was the same type of work 
outside of sitting there in the office for about an hour 
in the morning or half hour to one hour" (39). 

This testimony received some support from two 
other witnesses. Lloyd M. Burdge, who was a lead- 
man, thought that Belfield spent possibly 10% of his 
time with him between November and May on outside 
jobs (45), but Mr. Burdge later said, "My testimony 
was concerned with the time he was inspector" (46). 
Robert S. Edmisten, who was a mechanic, testified 
that he worked for Belfield a part of the period be- 
tween November 15, 1944, and May, 1945, while he 
was a leadman, and that he saw Mr. Belfield engaged 
in the same work as an assembly inspector, and that 
he never had seen him walk through the shop that he 
didn't have some work of this type before he went 
through and that, when he was working in the plant 
on the days the witness was there, "he would be doing 
the same class of work that I would be doing, which 
would be accepting or rejecting parts that went into 
the machinery" (51), that while the witness was in 



19 

the plant, Belfield would be engaged in that kind of 
work about 75 % of the time, as near as he could fig- 
ure (51). The witness had never had an order from 
Belfield. He got his instructions from Fogman. 

On the other hand, Belfield testified that he was a 
machinist by trade, that his life's occupation was in 
the machinery business, and that he had acquired 
"all the knowledge and skill for a rating in that de- 
partment," and that prior to the war, he had been a 
journeyman machinist for fourteen years (33). He 
started to work as a shop inspector for Webster- 
Brinkley Co. some time in January, 1943. His experi- 
ence as an inspector, therefore, covered more than a 
year and a half before he was chosen as Assistant 
Chief Inspector. At first, he was an inside assembly 
inspector, but was later transferred to the outside as 
an outside inspector. As assembly inspector, he 
watched the different machines being assembled and 
saw that "they were assembled right and that they 
worked free" (33). On the outside, he inspected parts 
being made in machine shops and foundries in Ta- 
coma, Portland, Aberdeen and Hoquiam, Port An- 
geles, Port Townsend, Shelton and Everett. In Au- 
gust of 1944, the Inspection Department of the Web- 
ster-Brinkley Co. was reorganized. Belfield testified 
he "was brought in from the outside to help Mr. Fog- 
man reorganize the Inspection Department and to ac- 
quaint him with the procedure" (34). He says that 
his primary basic duties in the plant were more or 
less to look over the inspection reports in the morning 
when they came in and to work with the other in- 
spectors inside the plant and outside the plant. He 



20 

says that when he first came into the office in the 
morning, he looked over the inspection reports and 
sorted out the ones that were in question and "chased 
some of them down for Engineering or handed them 
in to Mr. Fogman." He admits that he was furnished 
with blueprints to guide him as to the way to inspect 
and what allowance should be made. He says that an 
inspector was furnished with a manual and required 
to be able to use it. He says the inspectors would 
merely go around in the outside plants and inspect 
the parts with the drawings. When he went out with 
Mr. Burdge, for instance, and they arrived at a plant, 
they got out their tools and inspected the parts with 
the drawing. Belfield took some parts and Burdge 
took others. But he admitted that he did sign reports 
of rejections and exceptions (57). He denied that 
when he was away from the plant with Burdge, he 
told him what to accept or what to reject. But on 
cross-examination, Belfield admitted that there were 
two types of inspection reports, that some were typed 
and some pencilled, that he did not personally make 
reinspection reports when he reinspected parts unless 
the part was pretty bad, that generally he would get 
the Engineering Department in on it or the Chief In- 
spector. He says the original inspectors generally 
signed their reports and that when he made an or- 
dinary inspection report, he signed it and that the 
files and records ought to contain the ordinary inspec- 
tion reports which he made during this period of time 
(57). (As we shall point out later, there is not one 
inspection report which is signed by Belfield as the 
original inspector). He admitted that the reports 






21 

which were O.K. and came in in pencil were sent 
through to the girl to be typed but that if the part 
were rejected, those reports were gone over by Mi. 
Fogman or himself and Engineering at different 
times (57). The favorable reports typed up by the girl 
were signed by her as a mere formality. He admitted 
that he signed all of the rejection reports when Mr. 
Fogman was, absent (58). He insisted that there were 
other inspectors who signed them too, but later, he 
stated that he was then referring to the O.K.'d re- 
ports (58). He admitted that it was the function of 
Mr. Fogman and himself to determine whether or not 
rejected parts could be reworked or whether anything 
could be done with them or whether they should be 
simply cast aside (58). He grudgingly admitted that 
he did go out sometimes and reinspect those parts 
himself to see if he thought the original inspection was 
in error (59). He at first denied that any disputes 
ever arose between the Webster-Brinkley inspectors 
and the government inspectors, but he later admitted 
that there were differences of opinion and that these 
differences at times, especially in Mr. Fogman's ab- 
sence, came up to him (59). He denied that Inspection 
had the final word on the matter but claimed that it 
would be up to Engineering. He admitted only one 
conference with the General Manager and the Works 
Manager or the heads of other departments in con- 
nection with some of these difficulties (60). 

But the evidence as to the character of his duties, as 
it may be gleaned from the testimony of his own wit- 
nesses and the witnesses for the defendant, adds much 
to Mr. Belfield's admissions and disproves many of 



22 

his assertions. Mr. Burdge, one of the plaintiff's wit- 
nesses, testified in answer to a question how they in- 
spected, that they had prints, tolerances were given 
on the prints that the parts were to conform to. The 
inspectors would measure with the micrometers for 
the sizes to determine if they were within the specifi- 
cations. Lots of the pieces were large and it wouldn't 
be possible for one man to turn them over, to pick 
them up, or to do any handling that one would have to 
do to check them (46). 

"Mr. Belfield was engaged in the same kind 
of work that I did, in lifting or turning these 
parts around. When I was handling a large, 
cumbersome piece, he helped me in turning or 
twisting it. He followed that practice during all 
of the time when we would be on the job to- 
gether." (46) 

He also testified as to the reports that were made 
on rejected material. He placed them in the office 
where there was a basket to receive them. 

"On rejected materials, they were usually next 
considered by Mr. Belfield. So far as I know, he 
checked them over to see if they were made out 
correctly, that is, whether I had made an error 
in my pencil work on them." 

When asked whether questions didn't frequently 
arise as to whether or not materials should be re- 
jected or were usable, he said: 

"Yes, sometimes, if they were very near to the 
tolerances on the print, the discussion would 
come up as to whether they could be used or 
passed." 

Then he was asked : 



23 

"When you say that your judgment on the 
matter was final, isn't it true, as a matter of 
fact, that many cases did go beyond you to Mr. 
Belfield or to his superior for further action? 

A. That is true, if it was a questionable part." 

He also testified that the inspections he made were 
original inspections, that is, the first inspection 
made by anyone connected with the Webster-Brinkley 
Co. He admitted that they occasionally had trouble 
over defective parts that did not come up to specifi- 
cations. When asked whether he ever saw Mr. Bel- 
field come down to reinspect parts, he said: 

"I believe I have asked him to come down. We 
used to get castings sometimes that were faulty 
— that had cracks or were poor castings, and I 
was doubtful as to whether they could be used. 
I used to ask Mr. Belfield to come down and look 
[ at it." (48). 

In that testimony, Mr. Burdge has clearly indicated 
that he was not only responsible to Mr. Belfield but 
that Mr. Belfield was called upon to exercise a judg- 
ment and discretion superior to that of the ordinary 
inspectors. He also expressly admitted that he was 
supervised entirely by Mr. Belfield and Mr. Fogman 
(49). Mr. Edmisten in like fashion inadvertently 
showed Mr. Belfield's function. He was asked (52) : 

"If a novel question came up and you requested 
Mr. Belfield, what did he do about it?" 

A. "Well, he would say, 'Well, let's go over 
and take a look at it/ and he would take his 
prints and tools required. He would look at it 
and say, 'Well, maybe we had better make a re- 



24 

port on it and have Fogman or Engineering come 
down and take a look at it, or the Maritime in- 
spectors'. " 

Again, he said (54) : 

"When seeing Mr. Belfield on the floor a lot of 
times I would ask his advice — should we use it or 
shouldn't we use it. That would be about all. 

On this matter, Warren D. Thacker, who was at 
one time employed by the Webster-Brinkley Co. to 
organize the paper work and procedure of the Inspec- 
tion Department but who is not now employed by the 
company, testified at length. He was an independent, 
disinterested, intelligent and well informed witness, 
who was in a superior position to observe Mr. Bel- 
field's work. He was friendly to Mr. Belfield. The 
court can relv on his testimony as accurate. Mr. 
Thacker's particular duty when employed was to as- 
certain just exactly what the various individuals in 
the Inspection Department were doing and to assist 
in the reorganization of the department and to pre- 
pare a manual (73). He spent some four months in 
the department. He sat at the very same desk occu- 
pied by Tom Belfield. He discussed with him person- 
ally the manual which he was preparing (74). This 
manual outlined the duties of the Chief Inspector, his 
Assistant, and all the inspectors in the department. 
He says that for the first six weeks of his work, he 
was with Belfield almost constantly (74). Belfield 
went with him to each of the inspectors and intro- 
duced him. He and Belfield went about the plant for 
the purpose of investigating the duties of the insped 
tors and Belfield's duties as well. Belfield approved 



25 

the manual, and many of the things that were includ- 
ed as a part of his duties in the manual were sug- 
gested by Belfield himself (75). Thacker accompanied 
Belfield on his inspection trips outside the plant. He 
explains the inspection procedure. So far as original 
inspections and approvals were concerned, inspectors 
were stationed throughout the plant at strategic spots 
where inspection work might be required. Each of 
these inspectors was given a supply of forms which 
he filled out as he inspected the various lots and parts. 
There were three classes of inspection. There were 
those parts that were outright rejections, those parts 
that were complete acceptances, and then there were 
borderline cases. In cases of outright rejection where 
a part obviously could not be worked to dimension or 
it was not to dimension, the inspector was entitled to 
put a rejection tag on it. If it was obviously within 
the limits, the inspector was empowered to accept it. 
If it was a borderline case, he had to use his judg- 
ment. If he found it impossible or difficult to decide, 
he could and did call upon either Belfield or Fogman 
for a final decision on the matters within their discre- 
tion. It it was beyond their discretion, they some- 
times called on other higher employees of the com- 
pany — the Engineering Department (76). 

The original inspector made out the reports of the 
original inspection in his own handwriting and had 
them at his work place in the plant. When he handed 
in his conclusions on the pencilled copy of the inspec- 
tion report, he turned it in to the Inspection office at 
4:00 o'clock in the afternoon. The following morning, 
the pencilled copy was checked by Mr. Belfield. Those 



26 

that were approved were laid in one pile and those 
that were rejections were laid in another pile. Tht^ 
rejected reports would be very carefully read and 
checked by Belfield and initialled by him and turned 
over to the girl for typing (76). The accepted reports 
went on to her and were typed by her without further 
comment or signature or checking. Then there were 
what were known as rework orders. If obviously* the 
part could be reworked, that might be handled by a 
leadman. The other type of rework was determined by 
the mechanical engineer and was handled as a rejec- 
tion. Mr. Belfield had actually to approve the rework 
orders because they were a rejection (77). Mr. 
Thacker also very fully described Mr. Belfield's du- 
ties. He said that he would meet Belfield at the of- 
fice in the morning at 8:02 o'clock when he came in. 
The first thing Belfield would do would be to go 
through the pencilled copies of the reports. 

"The normal course of things was for Tom to 
check the reports, approve them as to being cor- 
rect or not correct. On these reports, in many 
cases, the actual dimensions themselves that were 
at fault were mentioned. Tom's duty, there, was 
to determine that the inspector was right in re- 
jecting." (83) 

He also went through the formal copies, that is, 
the typewritten copies that were for general distribu- 
tion, in Mr. Fogman's absence, but if Fogman was 
there, Belfield went over the pencilled copies and 
then made a tour of the plant. 

"We would drop into the Warehouse Depart- 
ment, go from there over to Assembly, around 
through the machine shop, consult with the var- 



27 

ious inspectors. They very frequently had bor- 
derline inspection problems that they didn't feel 
competent to decide which were left up to Mr. 
Belfield's judgment or Mr. Fogman's judgment, 
if he could be reached. Mr. Fogman was absent 
very much of the time. He was almost always 
late from one to three hours. He was away for 
two or three days at a time when he simply didn't 
show up for work. It had to be handled and was 
handled by his assistant. The acting Chief of the 
Department during Mr. Fogman's absence was 
Mr. Belfield (78). The reports were signed bj> 
Belfield if Fogman was not in. After the tour of 
inspection, we would return to the office or- 
dinarily. Belfield was subject to call throughout 
the plant. You couldn't make a regular routine 
out of your calls. An inspector might call in and 
ask for Tom and ask for him to come and de- 
termine what was to be done — a borderline re- 
jection (78). The inspectors from outside, Wal- 
laston and Burdge, called him regularly. They 
were outside, away from the plant, were required 
to use a little better judgment and a little more 
independent judgment than the inside inspectors, 
but still they would ask where they should go on 
their next call occasionally, and inquire what 
should be done. Those calls were mostly directed 
to Mr. Belfield (79). Mr. Belfield directly su- 
pervised the work of ten to twelve people. The 
direct supervision of the people was through Mr. 
Belfield." (79) 

Mr. Thacker testified that on his trips around with 
Mr. Belfield, he never saw Belfield make an original 
inspection ( 79 ) . On those trips, he was either making 
the rounds of the Inspection Department employees 
or he was called out directly by an inspector because 



28 

of some indecision on the inspector's part (79). Very 
often, he would recheck work of an inspector or he 
might tell the inspector to go ahead and write up a re- 
jection on this or he might say, "This is all right," 
inspect it, and the inspector would write up his re- 
port (79). Thacker reiterated that when he was 
walking around with Mr. Belfield, Belfield was not 
doing inspecting. He said that Belfield disliked paper 
work but liked to be out circulating in the plant and 
that never at any time when the witness saw him or 
was with him did he ever go to any inspection spot 
in the plant and station himself there for the purpose 
of inspecting parts that had not already been inspect- 
ed by some other inspector and were not in doubt. 
He said he knew of conferences with Belfield in the 
Inspection office. He said he sat in on some of them. 
He knew that Belfield had conferences among the in- 
spectors. Primarily, that is, he met with one or two 
inspectors regarding some particular part that was 
a borderline case (84). 

"Someone has to decide those points, and it 
was Mr. Belfield's duty to determine — either the 
fact that they were usable or that they must be 
passed on to someone with greater authority to 
determine whether they could be used or not." 
(85) 

Gerald S. McCarthy, the Works Manager of Web- 
ster-Brinkley Co., but no longer in its employ, stated 
that he had heard the testimony of Mr. Thacker aiid 
that it was correct (88). The Inspection Department 
was under Mr. McCarthy and he said that he held the 
Chief Inspector responsible for the entire activities of 
the department and, in the absence of the Chief In- 



29 

spector, he held the Assistant Chief Inspector re- 
sponsible (88). He denied that he had ever gone over 
Mr. Belfield's head in dealing with the inspectors in 
the department. He testified that he had observed the 
operations of the Inspection Department throughout 
the entire plant, both morning and afternoon, every 
day when possible. As to the work of Belfield, he 
testified that he made trips to the outside plants and 
that Mr. Belfield would have occasion to inspect parts 
which were doubtful after coming from a sub-con 
tractor's plant, that in some instances Belfield made 
trips to Western Gear Works to establish standards 
acceptable to the Inspection Department (90), that 
differences of opinion arose between the government 
inspectors and the Webster-Brinkley inspectors as to 
usability of parts and when they arose, doubtful parts 
were discussed (90). He said there were other flaw^, 
such as welding and casting trouble, that those were 
matters of judgment to a much greater extent than 
tolerances, and that it was necessary for either Bel- 
field or Fogman to discuss such matters with the 
Navy inspectors as to what they thought they could 
do to save such a piece if the Inspection Department 
thought it was justifiable to save it. He said that 
there were numerous conferences at which the top 
executives and Belfield and Fogman, either one or the 
other or both, were present in connection with the 
winch contract, because of some disagreements or dif- 
ferences of opinion with the Maritime Commission in- 
spectors as to certain standards (91). The confer- 
ences were called at various times to determine the 
exact standards which the Webster-Brinkley Co. felt 



30 

made acceptable winches. He testified as to hiring or 
firing that Fogman had the right to hire or fire any 
employee in the Inspection Department and that Bel- 
field's recommendations would receive consideration 
(91). He said that during the absence of Mr. Fog- 
man, and his attendance was very irregular, Mr. Bel- 
field was held responsible for the activities of the de- 
partment. He said that he could not possibly have 
supervised the other activities in the plant, supervised 
the men in the Inspection Department, and made the 
decisions that were necessary and allocated the men 
to their duties in the day to day operation of that de- 
partment, that Mr. Belfield did that work, that when 
Mr. Fogman was present, he in general took over the 
allocation of the work in the Machine Shop but that 
Belfield took care of the allocations in the assembly 
departments and on the outside, that in Fogman's ab- 
sence Belfield took care of all of the assignments 
(92), that it was quite often necessary for Belfield or 
Fogman to reinspect parts for any one of a number of 
causes. The purpose would be to determine the final 
satisfactoriness based upon their knowledge and judg- 
ment or to refer the case, if it seemed questionable 
to them, perhaps to the Engineering Department or 
perhaps to McCarthy himself, for final decision (92). 
McCarthy said that his contacts with Belfield oc- 
curred several times a day personally, and anywhere 
from three to four times a day by telephone or inter" 
communicating system, that he saw him sometimes in 
the office, sometimes in the plant, and sometimes in 
McCarthy's office. In his opinion, Belfield did not 
spend over 5S of his time in original inspection work 



31 

(94). He said that he had been in the Inspection De- 
patrment or inspection areas of the plant at times as 
many as six hours in a day and that he would say he 
spent 25% or a little more of his time in the area of 
the Inspection Department. 

Mr. George Gregson, the General Manager of the 
Webster-Brinkley Co., testified that he knew Belfield 
and his work, that Belfield was responsible for the 
operation of the Inspection Department in the absence 
of his superior, Fogman (104); that he had spoken 
with him often, that in March, 1945, there was trouble 
on the winch contract; that the Maritime Commission 
took the position that the standards being set by the 
Inspection Department were not high enough, that 
that was a very serious matter and that on at least 
two occasions Belfield was present at conferences in 
the office of the President, Mr. Bannan, to advise the 
management and the President of the company as to 
the position Inspection took as against the charges 
made by the Maritime Commission inspection depart- 
ment (104). 

But perhaps the most important piece of evidence 
showing that Belfield did have to exercise discretion 
and judgment is contained in defendant's Ex. No. 
11-A and plaintiff's Ex. No. 6. There was in court 
every inspection report made during this period, both 
acceptances and rejections (66). They filled one and a 
half filing cases. As testified, articles which were 
passed by the original inspector were only formally 
approved. The initials of the Chief Inspector, "H. F." 
were affixed by the secretary (66). But all of the 
rejections by the original inspectors had to be ap- 



32 

proved by Fogman or Belfield. No other person was 
authorized to initial those reports. Of the thousands 
of reports in those files, 1,817 were rejection reports. 
Belfield picked out seven reports — we are not sure 
they were all rejections — where he says his initials 
were signed by someone else, but he does not know 
by whom. Four of those occurred on the same day, 
December 27, 1944, and all of them were between 
December 28, 1944, and January 4, 1945. When Bel- 
field testified, there were tabs to mark these seven. 
Belfield and his counsel had the opportunity to ex- 
amine every one of them. But he did not question 
any others. He finally said, "I never went through 
but just a few" (111). The fact is that 599 of those 
rejection reports were signed with Belfield's initials. 

But there is another very significant fact in the 
reports bearing upon and rebutting Belfield's testi- 
money. Belfield had testified he made many original 
inspections. Every report carried the name of the 
original inspector. On not one of the 1,817 reports 
does Mr. Belfield's name appear as the original in- 
spector. Wherever it appears, it is as reviewing in- 
spector. 

The lower court failed to distinguish between the 
two types of reports and utterly failed to grasp the 
significance of the rejections and the suggestions and 
directions frequently placed thereon by Belfield. He 
said (113): 

"These reports seem to the court, as disclosed 
by the evidence, to have been in themselves some- 
thing of routine which was done pursuant to es- 
tablished procedure. They were done in a large 



33 

percentage of the instances mentioned in the evi- 
dence as a matter of routine by some clerical 
employee or typist who had affixed the initials 
of Mr. Belfield. I believe, of those that were 
specifically mentioned or introduced in evidence, 
there was only one where the initials of Mr. Bel- 
field were affixed by Mr. Belfield's own hand." 

This indicates a complete misunderstanding of the 
evidence. The inspection reports which were O.K. 
were signed "H.F." by the secretary as a matter of 
routine (not with Belfield's initials), but no witness 
testified that the rejected reports were so signed. 
There were 1,817 rejection reports in the files in the 
courtroom subject to the inspection of Belfield and his 
counsel. Belfield referred to 10 reports in all, one 
signed by Fogman, two admittedly by himself (110). 
Mr. Washington's testimony (66, 67) is that 599 of 
the rejection reports (defendant's Ex. A-10) were 
signed by Belfield. Assuming the remaining 7 were 
all rejections, and we accept Belfield's testimony, the 
evidence still is that 592 were signed by him. Two 
hundred reports were introduced in evidence (defend" 
ant's Ex. A-ll and plaintiff's Ex. 6. There is, there- 
fore, absolutely no support for the court's assertion 
that there was only one where the intials of Belfield 
were affixed by Belfield's own hand. 

There is another vitally important feature of the 
rejection reports which was entirely overlooked by the 
lower court. The lower court referred to all of the 
reports as "routine." On a number of the rejection 
reports in evidence, the reviewing inspector and, in 
many cases this was Belfield, has in his own hand- 
writing written directions or suggestions as to what 



34 

should be done with the rejected part. We do not 
have present access to defendant's Ex. A-ll and plain- 
tiff's Ex. 6, but we ask the court to examine them in 
confirmation of our statement. Had the lower court 
examined them, he would have seen that those reports 
clearly showed that Belfield was exercising discre- 
tion and judgment in making very important deci- 
sions for his employer. As previously stated, it would 
seem to be a fact that the ordinary inspectors them- 
selves exercised discretion and judgment. Even if it 
were a fact, as we believe it is not, that Mr. Belfield 
did a large amount of the same type of work as the 
inspectors under him, that would not remove him 
from the exempt class. The regulations of the Admin- 
istrator lay down no such test. The test is not wheth- 
er the supervising administrative official does some 
of the same type of work as those under him, but 
"whether he assists another employee who is a bona 
fide executive or administrator and exercises judg- 
ment and discretion in the performance of nonmanual 
work." We submit that it is clear that the only man- 
ual work done by Mr. Belfield was that incidental 
to the job of inspection, that even the duties of the 
original inspectors involved judgment and discretion, 
that that is what they were paid for and what justi- 
fied their high salaries, that Mr. Belfield did not 
make the original inspections to any appreciable ex- 
tent but that he did make the review inspections, all 
involving the exercise of discretion and judgment, 
that he assigned the inspectors in the assembly to 
their stations ; that in Mr. Fogman's absence he made 
all of the assignments and certainly supervised all the 



35 

inspectors; that frequently he held conferences with 
his inspectors in the discussion of inspection prob" 
lems; that he was frequently called upon by those in- 
spectors to come out and discuss problems with them ; 
that he was also frequently called by the outside in- 
spectors for assignments and to discuss their prob- 
lems; and that in connection with his work he was 
also called upon at times to make reinspections of 
parts as a check on the original inspections. His supe- 
riors testified that they held the Chief Inspector re- 
sponsible for the operation of the department and, in 
his absence, Belfield, the Assistant Chief Inspector. 
It seems to us that there cannot be a shadow of % 
doubt that Belfield falls within the definition of the 
Administrator as laid down. 

There is authority supporting this conclusion. In 
Ashworth v. E. B. Badger & Sons Co., 63 Fed. Supp. 
710, the employee was an inspector-expediter. He 
went out to the plants of suppliers as did Belfield. 

"Equipped with plans, specifications and in- 
structions from the Boston office, he would pro- 
ceed to the plant of the vendor in question and 
present himself as the Badger inspector assigned 
to that job. He was then introduced around the 
plant and familiarized with plant procedure. 
Most, if not all, of his assignments were at plants 
engaged in the fabrication of pipe or the manu- 
facture of pressure vessels. It was his duty to 
observe the fabrication or assemblage of the 
product from its initial stage until completion, 
making frequent checks to see that it conformed 
with the plans and specifications which he pos- 
sessed. At times, these checks consisted of mere 
physical measurements. At other times, they 



36 

were merely visual inspections, and frequently 
they involved the observation of hydrostatic or 
pneumatic tests made by the employees in the 
particular plant. If a variation from the plans 
or specifications appeared, he would notify the 
management or its representative in the plant. 
If they refused to correct the variation or if they 
requested that it be allowed to remain, the plain- 
tiff would normally consult the Boston office for 
instructions as to how to handle it. In any event, 
if plans or specifications were not met, the 
plaintiff had authority to inform the vendor that 
the product was not acceptable. " 

He also observed and passed on crating and packag- 
ing. If a job moved too slowly, he would try to speed 
it up. This involved interviewing his vendors and 
contacting other Badger inspectors on the troubles 
outside his area. He performed some other duties 
along the same line. Judge Ford held that his work 
was along specialized lines requiring special training, 
experience or knowledge, that it clearly involved the 
exercise of discretion and independent judgment, that 
under the regulation "an employee possessing the au- 
thority to make decisions on his own account without 
discussion or instruction from others may be said to 
exercise 'discretion and independent judgment'. " 
Judge Ford also remarked : 

"Employees serving in the plaintiff's capacity 
are more or less on their own in the field doing 
important work for the purpose of enabling the 
defendant's business to function. The unsup- 
ported testimony of the plaintiff that he perform- 
ed manual labor at times does not aid him. True, 
he performed some manual labor, but that was 
incidental to his work." 



37 - 

Dolan v. Zimmerman, 65 Fed. Supp. 923, is helpful. 
There, Judge Ford had to pass on the classification of 
a large number of employees. One was an inspection 
engineer with work quite similar to Belfield's. He was 
held exempt as an executive. Judge Ford also passed 
the job of Assistant Chief Industrial Engineer, and 
held it exempt as administrative notwithstanding that 
the employee did "some routine work incidental to his 
duties as an executive employee.'' He found that an 
Assistant Industrial Engineer was employed in an 
"administrative capacity." He also passed upon the 
job of an Assistant Expediter who did internal ex- 
pediting and carried on a number of special assign- 
ments. He held him exempt as an administrator. 

In Henry v. Chemical Construction Co,, 11 Lab. 
Cas. 63,442, the court was dealing with an inspector- 
expediter whose job in many respects resembles Bel- 
field's, except that it was a less important one. 

"The plaintiff in the performance of his work 
inspected and either approved or rejected fabri- 
cated pipe and fittings and other materials at 
the vendor's plant. In the performance of his 
duties, the plaintiff was required and found to 
be familiar with specifications, blueprints, draw" 
ings and purchase orders. If the work did not 
conform to the drawing and specifications, plain- 
itff advised the vendor and immediately reported 
to the home office. If the home office advised him 
that the material should be accepted notwith- 
standing variations, plaintiff did then proceed to 
approve the material. He was required, however, 
to use his judgment and discretion in determin- 
ing whether the work should be held up or per- 
mitted to proceed. When he approved, his de- 



38 

cision was accepted as final and not questioned, 
and when he determined the pails were up to 
standard the work proceeded and the said parts 
went into the job. At the various plants under 
his jurisdiction he took measurements of the 
parts, made visual inspections and observed tests 
made by the vendor's personnel after which he 
informed the vendor of his decision as to whether 
the material was acceptable." 

The court held he was employed in an administra- 
tive capacity and therefore exempt. 

In Bender v. Crucible Steel Co. of America, 71 
Fed. Supp. 420, the court was dealing with a foreman 
who apparently had the duties of an inspector. As 
such, he exercised functions similar to those exercised 
by Belfield. The court said : 

"The foreman, when a doubt arose as to the 
rejection or approval of a partly completed ar- 
ticle, had the power to determine whether it 
should be rejected or an attempt should be made 
to perfect it. Also the foreman could determine 
whether or not material alleged to be of no use 
to the company could be removed from the plant/ ' 

The court also said : 

"Some of the foremen included in the non- 
exempt work claimed by them the clerical work 
they performed in maintaining production and 
personnel records and making reports in connec- 
tion with their particular department. Such work 
was clearly a part of supervisory duty also re- 
sembling the duty of a bookkeeper. Of the same 
nature was work necessary in the inspection and 
testing of the work of employees under super- 
vision, even when a foreman in an emergency 



39 

temporarily aided an employee in the LaBelle 
Works in his job. Such aid was nonexempt work." 

The court held that the foremen were exempt. 

1 IL 

The lower court found that Belfield was employed 

during the period in question for $425.00 a month 
upon the basis of forty hours of work per week. The 
defendant maintained that the employment was for 
no definite number of hours per week but to do the 
job, in short, for a fluctuating number of hours per 
week. 

The position of the court has no support at all 
in the evidence. Even Mr. Belfield testified that when 
he was employed, he was told that there was to be no 
overtime (38, 62). Later, when asked what was his 
basic week, he testified (55) : 

" After we went on salary, I think it was sup- 
posed to be 44 hours. 
Q. A 44 hour week? 
A. Yes." 

The amount awarded Mr. Belfield is calculated on 
the basis of employment for a 40 hour week. It is 
therefore clearly erroneous. 

But we think that the testimony shows that the 
employment was for a fluctuating work week, that 
Belfield was employed to do the job and to spend as 
much time on the job as was necessary to do it prop- 
erly, that his employment was on exactly the same 
basis as that of all of the other executive and ad- 
ministrative employees in the Webster-Brinkley plant. 
No one of them was employed for any definite num- 



40 

ber of hours per week and although all of them worked 
many hours in excess of 40 or 44 per week, no one of 
them received any additional compensation for it. 

Mr. McCarthy, Works Manager and Belfield's su- 
perior, testified that he talked to Belfield, informed 
him what his salary would be and said, 'The hours 
of work were explained as the hours that the plant 
operations normally worked and that the other ex- 
ecutive and administrative personnel worked, which 
at that time was six days a week." (It appears else- 
where that the normal work day was 8 hours a day.) 
Again, on cross examination, he said, speaking of 
Belfield, "He never complained to me that he was 
putting in hours of overtime and was not paid for 
it. He complained that he was putting in hours of 
overtime but I don't remember him complaining about 
the overtime. He understood when he took the job 
that he was on a fixed salary. 

"Q. You had that understanding with him? 
A. I know I did." 

Mr. Gregson, the General Manager and a member 
of the Operating Committee of which Mr. McCarthy 
was also a member, testified that all of the executive 
or administrative personnel were hired to do a defi- 
nite job irrespective of the time it took, that none 
were ever hired for a definite number of hours per 
week (103). Belfield's own testimony and actions 
confirm these statements. It will be recalled that Bel- 
field, prior to his appointment as Assistant Chief 
Inspector, had been previously employed as an in- 
spector for about a year and a half at the hourly 
rate of $1.50. During that time, a record had been 



41 

kept of his time and he had been regularly paid his 
basic salary and overtime at that rate (41, 38, and 
checks in plaintiff's Ex. 1). His pay checks carried 
on their face the exect number of hours worked per 
day. 

After November 15, and after an application to 
the Stabilization Unit by which a salary of $425 a 
month was aproved, Belfield was paid semi-monthly 
on the basis of $425 a month without overtime. After 
his employment on the salary basis, no check was 
kept of his time. Although he was paid no overtime 
during all the 25 weeks of his employment as Assist- 
ant Chief Inspector, he made no request for any over- 
time payment. He protested on the amount of the 
overtime he was called upon to put in but he never 
claimed that, under his contract of employment, he 
was entitled to any payment for it. The lower court 
was interested in and clarified this point. The court 
asked Belfield: 

"I know, but whom did you inform that you 
had an overtime claim ?" 

Belfield replied, " I never said I had an overtime 
claim" (107). Later, he said, "Well, I told him that 
I was putting in quite a bit of overtime — I didn't 
like it, I told him." 

Also on Belfield's own testimony, it was not until 
eleven months after he quit his employment with the 
Webster-Brinkley Co. that he called Mr. Gregson by 
telephone and said he was going to sue for his over 
time (61). 

Mr. Belfield's claim is inherently incredible. If he 
is to be believed, he was suddenly raised from $1.50 an 



42 

hour to a basic regular rate of $2.42 with overtime at 
$3.63 an hour, and with no change of duties. That is 
a jump of 63%. No reason is suggested for any such 
increase. Such an increase is entirely inconsistent 
with the policy of the federal administration and the 
controls being exercised by it at that time. It is un- 
believable in the light of the w T age policies which were 
in effect in this country then that the Salary Stabiliz- 
ation Unit would have approved any such advance. 
If, on the other hand, Belfield were an administrator 
and his employment were for a fluctuating work week 
without overtime, then the action of the Stabilization 
Unit is understandable and consistent with Belfield's 
own actions. He had been accustomed to overtime as 
an inspector, he had been regularly collecting over- 
time, when on November 16, he is put on a salary. 
His time is no longer kept. He is paid semi-monthly, 
and accepted some fifty salary checks without any 
claims of overtime and never voiced even a suggestion 
of payment for overtime for a period of eleven months 
after he had quit his employment. We submit that 
the overwhelming weight of the evidence is to the ef- 
fect that Belfield's employment was for a fluctuating 
work week. Even, therefore, if this court should dis- 
agree with us as to the proper classification for Bel- 
field's job and hold that he came under the Federal 
Fair Labor Standards Act, it should still hold, under 
the evidence in this case, that the employment was 
for a fluctuating work week. In any event, there is 
no evidence at all supporting a 40 hour week. 



43 

[ III. 

As to the number of hours worked, there is no evi- 
dence whatever except the unsupported testimony of 
Belfield himself. To understand how frail is that 
testimony, we ask the court to read pages 41, 44, 54 
and 56 of the record. Belfield was first put on the stand 
and testified that he had kept some memoranda of 
his overtime, that part of it had been upon a time 
book and part on a desk calendar, that the time book 
was at his home in Spokane and that the kids had 
torn up the calendar. On the plaintiff's testimony that 
the record the plaintiff was trying to introduce had 
not been made up until after he quit his employment 
at Webster-Brinkley and not as a part of his daily 
work and routine, the court rejected the proposed ex- 
hibit. When asked to testify then as to the number 
of hours of overtime he worked between November 
15, 1944, and May 13, 1945, he said: 
"I can't answer that." (43) 

His counsel then asked to withdraw him from the 
witness stand. He stepped down, consulted his counsel 
and then his counsel attempted to put him back on 
the stand, but the court would not permit it at that 
time (44). Later, the court did permit him to resume 
the stand. He then testified that he had been con- 
fused. He was then asked if he knew now the total 
number of hours he had worked. He answered: 
"591 hours." (55) 

Just that. Nothing more. 

On cross examination, he was asked whether he 
could tell the total number of hours he worked in any 



44 

day or in any single week between November 20, 1944, 

and May 12, 1945. He said (56) : 

"From that paper that I turned in. 

Q. You have no recollection apart from that 
paper, have you, of the time that you worked? 

A. No, I don't believe I could. That has been 
quite a while ago." 

"That paper" is not in evidence. Is it not obvious 
that Mr. Belfield had no recollection of his overtime 
apart from the paper referred to which was itself 
secondary and self-serving and which is not in evi- 
dence? Is it not obvious that he had simply memo- 
rized the total of hours in Exhibit A to his complaint 
(6) after he had stepped down from the stand and 
been talked to by his counsel? The Federal Fair Labor 
Standards Act is set up upon a weekly basis, and pro- 
vides for overtime above 40 hours per week. That 
Belfield worked some overtime is undoubtedly true, 
but his unsupported testimony given as it was given 
in this case is wholly inadequate to establish the 
amount. The lower court on this unsupported testi- 
mony credited Belfield with an average overtime of 
2U hours a week for 25 consecutive weeks, that is, 
64 hours working time a week for every one of those 
25 weeks. There was some evidence to show, in spite 
of the absence of records, that he did not actually 
work every day or for full days (81). During that 
period of time, the plant was working on a 48 hour 
week, the clerical employees on a 44 hour week, but 
both only six days a week. Is it credible that any 
man who thought he was hired for a 40 hour week 
or even for a 44 hour week would work 64 hours a 



45 

week for 25 consecutive weeks without a claim of 
overtime? 

IV. 

This specification of error depends upon the pre- 
ceding. The court adopted a formula based upon the 
basic regular 40 hour week. It divided the annual 
salary of $5,100 by 52, making the weekly wage 
$98.08. The regular hourly rate was therefore $2.45. 
The overtime of 24 hours a week was allowed on that 
basis. If the basic week had been 44 hours, the al- 
lowance by the same formula would have been $1,- 
978.85. If the basis of Belfield's employment was a 
fluctuating work week, then, of course, it is impos- 
sible to calculate the recovery under the Federal Fair 
Labor Standards Act because the plaintiff was unable 
to establish the number of hours actually worked 
during any specific week. 

V. 

This specification of error depends upon the fore- 
going specification. Since the original calculation of 
overtime was incorrect, the doubling merely increased 
the error. 

VI. 

Since the decision in the lower court, Congress has 
enacted the Portal-to-Portal Bill of 1947 approved on 
May 14 of that year. Under Sec. 11 of that Act, the 
Federal Fair Labor Standards Act is altered so that 
it is no longer mandatory upon the lower court to 
double the amount of the overtime as liquidated dam- 
ages. If it appears to the court that the employer 
has acted in good faith, the court in its discretion 



46 

need not make any allowance for liquidated damages. 
It must be clear to the court that the employer in this 
case did exercise the highest degree of good faith. 
Belfield's duties were certainly such as afforded 
reasonable ground for the belief that he was an ad- 
ministrator. Under that belief, the employer applied 
to the Stabilization Unit of the Department of In- 
ternal Revenue for the fixing of a salary. The juris" 
diction of that Unit depended upon the classification 
of the employee in one of the exempt classes. If not 
exempt, the whole matter would have been transferred 
to the Wage, Hour and Public Contracts Division of 
the Department of Labor. The Stabilization Unit, 
believing, on the showing made, that this position to 
which Mr. Belfield was subsequently appointed, was 
exempt as administrative in character, proceeded to 
fix the salary at $425 a month. Relying upon this 
ruling, the W.B.Co. ceased to keep such records and it 
paid him regularly semi-monthly as it did all of its ex- 
ecutives and administrative employees. Mr. Belfield 
was in no wise damaged. He made no request for over- 
time for more than eleven months after his employ- 
ment ceased. 

On the other hand, the effect of the ruling of the 
lower court was a great injustice to the employer. 
When Belfield was appointed Assistant Chief Inspec- 
tor, he became entitled to a guaranteed monthly sal- 
ary. For the 25 weeks he was employed, he received 
a total of some $2,452. That was a high wage for 
the employment. In this case, he sued for overtime 
and the lower court proceeded to award him an ad- 
ditional sum of $4,249.76, or almost twice the amount 



47 

of his agreed salary. The result is that if he should 
received the amount awarded by the lower court, Mr. 
Belfield will have received for his services during the 
25 weeks $272.00 a week. This windfall he gets in 
; spite of his contract of employment, not because of 
any virtue on this part or any fault on the part of the 
Webster-Brinkley Co. We submit that such a result 
is more than unjust; it is literally outrageous. Had 
the lower court possessed any discretion at the time 
of entering judgment, as he now has under the Portal- 
to-Portal Act, we cannot believe he would have al- 
lowed double damages. In any event, if this court 
cannot itself dispose of the case finally, it should be 
sent back to the lower court for further proceed- 
ings under the law as altered by the Portal-to-Portal 
Act. Alaska Juneau Goldmining Co. v. Robertson, 12 
Lab. Cas. 51,252 (U.S. Sup. Ct, June 16, 1947) ; U9 
Madison Ave. Corp. v. Williams & Co., 12 Lab. Cas. 
51,253 (US. Sup. Ct., June 16, 1947); Lassiter v. 
Atkinson Co., 13 Lab. Cas. 63,947 (9th Cir., July 28, 
1947) ; Lasater v. Hercules Power Co., 13 Lab. Cas. 
63,946 (U.S. Dist. Ct., E. D. Tenn., July 25, 1947). 

But we believe the proper disposition of this case 
on the evidence calls for a reversal of the judgment 
of the lower court and dismissal of the cause. 






Catlett, Hartmann, Jarvis & Williams 

Attorneys for Appellant. 



No. 11680 



IN THE 

UNITED STATES 
CIKCUIT COURT OF APPEALS 

FOE THE NINTH CIKCUIT 



Webster-Brinkley Company, a corporation, 

Appellant, 

vs. 
Thomas R. Belfield, Appellee. 



Upon Appeal from the District Court of the 

United States for the Western District 

of Washington, Northern Division 



BRIEF OF APPELLEE 



Charles H. Heighton, 
Leo W. Stewart, 

Attorneys for Appellee. 
1021 Northern Life Tower, 

Seattle 1, Washington. 



THE ARBUI PRIlt, BCATTH 



— 1 1. iyw 



No. 11680 

EN THE 

UNITED STATES 
CERCUIT COUMT OF APPEALS 

FOR THE NINTH CERCUIT 



Webster-Brinkley Company, a corporation, 

Appellant, 

vs. 
Thomas R. Belfield, Appellee. 



Upon Appeal from the District Court of the 

United States for the Western District 

of Washington, Northern Division 



BRIEF OF APPELLEE 



Charles H. Heighton, 

Leo W. Stewart, 

Attorneys for Appellee. 
1021 Northern Life Tower, 
Seattle 1, Washington. 



I, IIATTLI 



Hi 
CASES CITED 

Page 

Anderson v. Mt. Clemens Pottery Co., 328 U.S. 
680, 66 Sup. Ct. 1187 11, 13 

Dize v. Maddrix, 65 U.S. 895, 324 U.S. 697 12 

Joseph v. Ray (CCA.) 139 F.(2d) 409 11 

Lawley v. Smith (CCA.) 140F.(2d) 439 11 

Rigopoulos v. Kervan, 140 F. (2d) 506 12 

STATUTES 

Federal Fair Labor Standards Act, 52 Stat. 1069, 
29 U.S.C §207 10, 13 



IN THE 

UNITED STATES 
CIMCUIT COUMT OF APPEALS 

FOR THE NINTH CIRCUIT 

Webster - Brinkley Company, a cor- 
poration, Appellant, } ^ ^ 

V &• 

Thomas R. Belfield, Appellee. 

Upon Appeal from the District Court of the 

United States for the Western District 

of Washington, Northern Division 



BRIEF OF APPELLEE 



L 

The appellant contends under its first assignment 
of error that the primary question of the case is one 
of classification of employment, hence a question of 
fact and not of law, whether Mr. Belfield was an 
executive or administrative official of the Webster- 
Brinkley Company. 

As the trial judge found the facts and was in a far 
better position to observe the witnesses and appraise 
their testimony than the appellate court, it would 
seem pertinent to first consider the conclusion reached 
by the trial judge and then examine the facts as to 
whether his views are sustained. The Court's findings 
in part are as follows: 



"As to the Plaintiff Belfield, I have considered 
all that has been testified to and all that has 
been said by counsel on both sides. It seems to 
me, and the court finds, concludes and decides 
that Mr. Belfield, while occupying a nominal 
rank in advance of the other inspectors, did noth- 
ing, in reality, different from what they did ex- 
cept to sign some inspection reports or to per- 
mit his initials to be attached or affixed to cer- 
tain inspection reports. Insofar as that was done, 
in this instance, it was a mere clerical perform- 
ance." (Tr. 112) 

Turning now to the facts, we find that the Webster- 
Brinkley Co. was engaged in furnishing Marine sup- 
plies, particularly windlasses, capstands, steering 
gears, and cargo winches on contract to the govern- 
ment. The most important contract during the period 
we are considering was the winch contract (Tr. 39). 

Mr. Gregson, general manager, admitted that this 
all important contract was losing money and said 
"* * * the loss was quite sharp, and it was very up- 
setting, that is, the possible loss was quite sharp 
and upsetting" (Tr. 105). He stated that as general 
manager he had a choice to stop further loss between 
re-organizing the plant or reducing salaries, and 
promptly added, "we could not reduce salaries" (Tr. 
105). Why? Because salaries were frozen. Mr. Greg- 
son therefor never had but one choice, and that was 
reorganization of the plant, which he promptly set 
about to do. 

The reorganization was effected by "promoting" 
employees to executive or administrative positions, 
thus actually reducing their salaries by eliminating 



over-time pay. That this was the purpose and object 
of the reorganization becomes clear when we consider 
that Mr. Belfield was promoted in August, 1944, when 
he was working as high as 15% hours a day and 
averaged 65 hours a week (Tr. 38). His wages for a 
65-hour week would be $116.25. The rate of pay he 
was then receiving, $1.50 an hour, plus time and one- 
half for overtime, made his average income in excess 
of $450.00 per month. Mr. McCarthy, Efficiency Ex- 
pert and Works Manager, corroborates the testimony 
of the General Manager by admitting that he defin- 
itely felt it was a promotion for Mr. Belfield to be 
called assistant chief inspector instead of inspector, 
even though his salary was reduced. His exact testi- 
mony is as follows: 

"Q. Do you mean that a man who had an income 
of $450.00 a month as wages and overtime and 
he is given $425.00 in salary, he is promoted — 
because he has a title? Is that correct? 

A. Well, to my way of thinking it is." (Tr. 96) 

Needless to say that Mr. McCarthy "was a new 
hand at the bellows" but made an able assistant to 
the general manager in carrying out the "reorganiza- 
tion." 

Now, what did they tell Mr. Belfield about the re- 
organization? He testified as follows: 

"Mr. Fogman 'who held title of Chief Inspector 
told me that I wouldn't have to work over-time; 
that the job would be easier; that I could be home 
every night, and that I would get $2.00 and 
something an hour." (Tr. 39) 

Why did this appeal to Mr. Belfield? He says: 



"At that time * * * I had been working long 
hours for over two years from January 1, 1943, 
to May, 1945. In all that time I missed very few 
days and in the last year had perfect attendance 
record, never having missed a day during the time 
we were making the winch job." (Tr. 39) 

He was, however, not too well sold on the argu- 
ment, so a further promise was made to come "inside" 
two or three months and he then could return "out- 
side." But "This was later changed. They put me on 
a monthly salary anyway" (Tr. 38). This "promo- 
tion" of Belfield was not a voluntary act on his part, 
but the pre-emptory order of the corporation. Did the 
Company keep its promises to Belfield? Belfield an- 
swers as follows: 

"Q. What was the difference in your work in 
the plant after August to what it had been be- 
fore? 

A. None. It was the same type of work out- 
side of sitting there in the office for about an 
hour in the morning, or half hour to one hour. 
That started in August. The duties after No- 
vember 15 were just the same as prior to that. I 
was asked by Mr. Fogman to work overtime after 
November 15 and I had to do so. At that time 
we were frozen in our jobs." (Tr. 39-40) 

He stated that he protested to Mr. McCarthy and 
Mr. Fogman several times, and that he kept a record 
of his overtime, and turned in his over-time to Mr. 
Fogman's secretary, and he showed it to Mr. Fogman 
several times (Tr. 40). There is no evidence that 
he performed any different work except initialing the 
inspection records as any other ordinary inspector. 



He exercised no discretion. He did not supervise, reg- 
ulate or direct other employees (Tr. 40). He had no 
authority to hire or fire (Tr. 40), and his work was 
of the same nature 90 per cent of the time as that 
performed by non-exempt employees (Tr. 36). He had 
no authority to leave the plant without a slip signed 
by Fogman (Tr. 63). Belfield's ordinary day would 
be as follows: He would arrive around 7:00 o'clock, 
although most of the salaried men came in around 
8:00 o'clock. He looked over the inspection reports 
that came into the office from the day before, sorted 
out the ones that were in question, chased some of 
them down for engineering or handed them into Mr. 
Fogman who would take care of them. He had no 
final say-so at all. When he arrived in the morning 
the rejected and o.k.'d reports were in the "box." 

"Q. Now, what independent, discretionary au- 
thority did you have over these reports, if any? 

A. None. 

Q. Did anybody else do the same thing that 
you did with regard to these reports? 

A. Yes. I merely separated the ones that were 
OK from the ones that were rejected. They event- 
ually went to Mr. Fogman, the Chief Inspector. 
* * * This work probably took half an hour to 
one hour, and then I went out in the plant and 
worked with the rest of the inspectors in, the 
assembly line in the shop." (Tr. 35) 

Mr. Belfield was corroborated by other men who 
worked with him, namely, Robert S. Edmisten (Tr. 
51), and Lloyd M. Burdge (Tr. 45-6). Those that 
disputed him in any manner were officers of the 



company who had other duties and who never had 
occasion to be around where Mr. Belfield worked only 
a small percentage of their time. Mr. McCarthy was 
in the plant twice a day when he could (Tr. 89). 
Later he thought 25 per cent of his time (Tr. 99). 

It is true that Warren D. Thacker, who is exten- 
sively quoted in appellant's brief, stated that he 
worked for about four months in the plant making 
up a manual for the use of inspectors, and sought 
considerable information from Mr. Belfield (Tr. 74). 
But his evidence is unconvincing. He makes frequent 
references to Mr. Belfield as "Tom," and that they 
were bosom friends (Tr. 82). Appellant's counsel 
states in his brief that from this fact the court can 
rely on his testimony as accurate. A reading of his 
testimony, however, would convince anyone that if 
Mr. Thacker was a friend of Mr. Belfield's, Mr. Bel- 
field didn't have any friends. He could well join with 
his prayers the petition, "May God deliver me from 
my friends, I will take care of my enemies." Even 
Mr. Thacker admits that he never saw Mr. Belfield 
after five o'clock in the evening (Tr. 84), which would 
seem to be about the time Mr. Belfield was half 
through his day's work. He also admits there were 
days he spent one, two, three or sometimes five hours 
with Belfield (Tr. 84). But the fact remains that 
about the only time Mr. Thacker really saw Mr. Bel- 
field was early in the morning when they walked about 
the plant (Tr. 83). 

We turn now to what counsel says is "perhaps the 
most important piece of evidence showing that Bel- 



field did have to exercise discretion and judgment," 
and is contained in defendant's Exhibit No. 11-A and 
plaintiff's Exhibit No. 6. 

Exhibit No. 11-A was introduced in the testimony 
of Herbert R. Washington, Assistant Treasurer of 
the Company. Mr. Washington stated that he compiled 
the exhibit from a large number of original inspec- 
tion records which were made by Mr. Belfield of re- 
jected materials, and bore his initials. The original 
records from which the exhibit was compiled was 
contained in two filing cabinets in the court room 
open for the inspection of the court and appellee. 
These files purported to show that out of 1817 rejec- 
tion reports the genuine initials of Mr. Belfield ap- 
peared on 599. Mr. Washington compiled this exhibit 
personally and was familiar with the whole matter 
(Tr. 71). 

In clarifying the exhibit somewhat Mr. Washing- 
ton made a very important statement, namely: that 
the record merely means that Mr. Belfield signed a 
typewritten report as assistant chief inspector, but it 
does not mean that he made the inspection or re- 
checked the inspection, but it only meant that the chief 
inspector had to countersign all the forms that showed 
rejections (Tr. 69). 

After the introduction of this testimony the court 
interrogated Mr. Belfield, who stated that in the 
mornings he would sign some of these reports, but it 
wasn't necessarily part of his daily work as he would 
be gone from time to time. The Court thereupon ad- 
mitted Exhibit 11-A with the statement that he 



8 

thought it was proper to receive in evidence the sum- 
mary of inspection reports to avoid the necessity of 
examining each inspection report separately (Tr. 70). 

Later, during the trial, an examination was made 
of the original records and several of the original 
inspection reports were taken out of the filing cabinet 
at random and became plaintiff's Exhibit 6. From the 
testimony of Mr. Belfield and from plaintiff's Exhibit 
6, it became clear that the original typewritten rejec- 
tion records that contained the penciled initials pur- 
portedly of Thomas R. Belfield were forgeries, or at 
least were not made by him (Tr. 109-110). Belfield 
had examined other original inspection records be- 
sides those introduced in evidence as plaintiff's Ex- 
hibit 6, and found that they also contained forgeries 
of his initials. It was now clear to everyone that Ex- 
hibit 11-A had been compiled without any thought of 
whether Mr. Belfield's initials were genuine or not, 
and while his initials might have appeared 599 times 
on the original records, it by no means meant that 
he had personally signed that many reports. It did 
mean, however, that most anyone who desired could 
sign his initials to these rejection records, and did so. 
These facts rendered Exhibit 11-A worthless, and ap- 
pellant never attempted to re-establish it. 

It is a great surprise to appellee that appellant now 
designates Exhibit 11-A as "the most important evi- 
dence in the case," for if it is, then appellant just does 
not have any. The trial judge in his memorandum de- 
cision referring to this "important evidence'' clearly 
indicates that he took into consideration all of the 



original records as well as Exhibit No. 6, when he 

stated : 

"Those reports seemed to the court, as disclosed 
by the evidence, to have been in themselves some- 
thing of routine which was done pursuant to es- 
tablished procedure. They were done, in a large 
percentage of the instances mentioned in the evi- 
dence, as a matter of routine by some clerical 
employee or typist, who had affixed the initials of 
Mr. Belfield. I believe, of those that were specifi- 
cally mentioned and introduced in evidence, there 
was only one where the initials of Mr. Belfield 
were affixed by Mr. Belfield's own hand." (Tr. 
113) 

It would be needless extension of appellee's brief to 
discuss other matters under the first assignment of 
error, as the question of the classification of Mr. Bel- 
field's employment is one of fact and rested in the 
sound discretion of the trial judge. We believe the evi- 
dence shows no abuse of that discretion and that there 
was ample evidence to support the decision. 

II. 

Under appellant's second assignment of error it 
maintains that there was no evidence to support the 
Court's finding of the overtime hours of Mr. Belfield. 
In its brief appellant sets out the testimony of Mr. 
Belfield, but not full enough to apprise the court as 
to the true facts. The testimony was as follows: 

"The Court : The total was what, as you stated 
just now? 

The Witness: 591 hours. 

Q. What was your basic week, Mr. Belfield? 



10 

A. Well, while I was at $1.50 it was supposed 
to be 40 hours. We got paid for overtime over 40 
hours. After we went on salary, I think it was 
supposed to be 44 hours. 

Q. A 44-hour week? 

A. Yes. 

Q. This overtime is computed on that basis, is 
it? 

A.Yes. ,, (Tr. 55) 

Mr. Burdge corroborates Belfield. He says: 

"I was paid an hourly rate of $1.50 an hour. 
I got overtime after eight hours a day, regardless 
of the week." (Tr. 44) 

Against this positive statement of Mr. Belfield and 
Mr. Burdge we do not find any official of that company 
that makes any positive statement at all. As appellant 
sets out in its brief (p. 40), Mr. Gerald S. McCarthy 
testified that all executives were hired to do a def- 
inite job irrespective of the time it took. That none 
was ever hired for a definite number of hours per 
week (Tr. 103). 

On what evidence would the Court be able to make 
a finding, except on the evidence of Mr. Belfield and 
Mr. Burdge and exhibits showing Mr. Belfield's over- 
time pay? The appellant offered nothing and certainly 
should not now be heard to complain. The right to 
overtime pay is statutory being covered by Sec. 207, 
Fair Labor Standards Act, which is as follows: 

"No employer shall * * * employ any of his 
employees * * * for a work week longer than 40 
hours * * * unless such employee receives com- 



11 

pensation for his employment in excess of the 
hours specified at a rate of not less than iy 2 
times the regular rate at which he was em- 
ployed. " 

The duty of keeping the overtime of Mr. Belfield 
was that of the Webster-Brinkley Company as the 
obligation was statutory. The fact that it did not do 
so cannot defeat the right of Mr. Belfield to recover. 
As was stated by the Supreme Court of the United 
States in Anderson v. ML Clemens Pottery Co., 328 
U.S. 680, 66 Sup. Ct. 1187: 

"The employer cannot be heard to complain 
that the damages lack the exactness and precision 
of measurement that would be possible had he 
kept records in accordance with the requirements 
of Sec. 11(c). And even where the lack of ac- 
curate records grows out of a bona fide mistake 
as to whether certain activities, or non-activities, 
constitute work, the employer having received the 
benefits of such work, cannot object to the pay- 
ment for such work on the most accurate basis 
possible under the circumstances." 

This view followed in other cases, namely : 

Lawley v. South (CCA.) 140 P. (2d) 439; 
Joseph v. Ray (CCA.) 139 F.(2d) 409. 

Appellant complains that Mr. Belfield, while telling 
the defendant's officials that he worked overtime and 
complained bitterly of the long hours, never actually 
demanded payment, and therefore should be denied 
payment. The burden, however, was not upon Mr. Bel- 
field to make such demand as the right to overtime 
could not be waived by him. The rule against estoppel 



12 

or waiver by failure to demand pay being well stated 
in the cases of 

Dize v. Maddrix, 65 U.S. 895, 324 U.S. 697 

and 

Rigopoulos v. Kervan, 140 F. (2d) 506. 

III. 

Appellant contends under this assignment of error 
that Mr. Belfield's overtime rests upon very frail testi- 
mony and asks the Court to examine certain pages 
of the transcript. We join in that request. 

We are certain that the evidence discloses that Mr. 
Belfield kept a daily written record of his overtime. 
He requested the company to keep a record of his over- 
time, and insisted upon Mr. Fogman's secretary keep- 
ing a record of it (Tr. 40). 

He had with him in court a statement compiled 
from his original records showing very minutely the 
amount of overtime. His failure to testify in the first 
instance the number of hours of overtime was not 
due to a lack of knowledge, but the confusion in his 
mind as to whether he should be permitted to testify 
or not. When he was recalled to the stand he ex- 
plained it as follows: 

"Q. What was the confusion in your mind? 

A. Well, I thought I couldn't answer that ques- 
tion on that over-time — the total amount of 
overtime that I had. I didn't think I could answer 
that the same as it was on the paper. 

Q. From the ruling the court has made and 
from what was said? 

A. That is right. ,, (Tr. 54-55) 



13 

This confusion was natural for a man of Mr. Bel- 
field's temperament and education. The court observ- 
ing him was aware of it for in his memorandum de- 
cision he states: 

"I carefully observed Mr. Belfield's demeanor 
on the stand, his manner of testifying, and all of 
the other measuring sticks by which triers of the 
fact may properly determine the credibility of a 
witness, and I would never be impressed that 
Mr. Belfield is a man of such a nature or disposi- 
tion — even if he had sufficient ability, in fact — 
to put in a position of discretion and important 
supervision. " (Tr. 113-114) 

The primary and statutory duty of keeping Mr. 
Belfield's overtime rested upon the appellant, and 
what Mr. Belfield supplied in the absence of any other 
rocrd, was amply sufficient to support the findings of 
the court. 

The Supreme Court in Anderson v. Mt. Clemens 
Pottery Co., supra, passed upon this very question and 
resolved it in favor of the appellee. 

IV. 

Appellant contends that specification of error un- 
der this title depends upon the finding of the court on 
its preceding specification of error. 

We believe that sufficient argument has already 
been devoted to this subject, and, further, that the 
matter of overtime is statutory and based upon 40- 
hour week. 

Sec. 207, Fair Labor Standards Act. 



14 

V. 

The specification of error under this head depends 
upon the previous one, as it only has to do with dou- 
bling the amount found. We believe it is sufficiently 
answered. 

VI. 

Under this head the appellant discusses the Portal- 
to-Portal Bill of 1947, and requests this Court to take 
judicial notice of it. Appellant bases this request for 
the reason and on the ground that it must now be 
clear to this court that the employer did exercise the 
"highest degree" of good faith; that Mr. Belfield's 
duties were certainly such as afforded reasonable 
grounds for the belief that he was an administrator; 
that they relied solely on the Stabilization Unit, and 
that Mr. Belfield was in no wise damaged since he 
made no request for overtime for more than eleven 
months after his employment ceased. 

We do not believe that the observations of appel- 
lant are correct or are substantiated by the record. 
They did not in good faith advance Mr. Belfield to an 
executive or administrative position, but in bad faith, 
in order to make a profit at a time when the company 
was losing money, took a good working man who was 
earning a large salary by overtime work, a faithful 
employee who never missed a day's work, and "pro- 
moted" him by giving him a title, but actually reduced 
his pay. This was all done without the consent of Mr. 
Belfield as was stated on cross-examination by Mr. 
Washington : 

"I did not say that the application made to the 



15 

Wages & Hours people was brought to the at- 
tention of Mr. Belfield." (Tr. 73) 

In truth and in fact the promotion was made without 
the knowledge or consent of Mr. Belfield. The promo- 
tion was accomplished on the fictitious and fraudulent 
promises of Mr. Fogman and Mr. McCarthy that he 
"wouldn't work overtime," "that the job would be 
easier," "that he would be home every night," "that 
he would get over $2.00 an hour" (Tr. 39), and "to 
come inside for a little while and then he could go 
outside" (Tr. 38). 

When these worthless promises were later con- 
temptuously disregarded Belfield was held on his job 
as a virtual slave for, as he says: 

"At that time we were frozen in our jobs." 
(Tr. 40) 

This odious conduct finally became so burdensome 
that even the stark reality of unemployment could no 
longer keep Mr. Belfield on the job, and he sent his 
written resignation to the company which is admitted 
by Mr. McCarthy (Tr. 97). Belfield further testified: 

"I protested to everybody I seen there, toward 
the last * * *." (Tr. 63) " 

He was finally permitted to transfer if he went to 
Western Gear, who, strange as it may seem, had the 
same president, Mr. Bannan, as the Webster-Brinkley 
Co. (Tr. 63). Is this the conduct of an executive or 
a slave? 

As an example of the double talk indulged in by the 
Company in behalf of Mr. Belfield we only have to 



16 

turn to the testimony of Mr. McCarthy regarding 
this so-called "promotion." Mr. McCarthy testified: 

"Q. You told him what his salary would be? 

A. That is correct. 

Q. And he was happy to take it, was he? 

A. Yes, I believe he was. 

Q. Did he say he was? 

A. He didn't express himself as being un- 
happy." (Tr. 97-98) 

It would be hard to find an oracle from Ancient 
Dehli better phrased than this. Mr. Belfield flatly de- 
nied that he ever talked to Mr. McCarthy about a 
salary until after he had been placed on one (Tr. 
107). When we consider that Mr. Washington corro- 
borates Mr. Belfield when he stated that the applica- 
tion to the Wages and Hours people was never brought 
to the attention of Mr. Belfield, is it any wonder that 
the Court believed the testimony of Mr. Belfield and 
not the officials of the Webster-Brinkley Company? 

From the fact that all of this testimony went into 
the record prior to the enactment by Congress of the 
Portal-to-Portal Act of 1947, approved May 14, 1947, 
when the good faith of the company was not an issue, 
it must now be apparent that if it had been, this rec- 
ord could have been grealy extended on this partic- 
ular issue. The mere application to the Stabilization 
Unit to advance or promote an employee can easily be 
done in bad faith, as well as good faith, as fictitious 
duties and responsibility may be claimed in the ap- 
plication but later never put into practice. We must 
resolve that the application for Belfield was made in 



17 

bad faith by the Webster-Brinkley Co., since the ap- 
plication was made without his knowledge or consent. 
It was not a bona fide promotion because his duties 
were not changed, only increased, but his salary was 
decreased. 

The Webster-Brinkley Co. received the benefits of 
Mr. Belfield's services and have become unjustly en- 
riched thereby. It comes with poor grace on their part 
to now try to pay off Mr. Belfield with a title and con- 
versation, simply because he made no specific demand 
for overtime pay until eleven months after his em- 
ployment ceased, although during his employment he 
made constant complaint. A workingman cannot be 
deprived of his rights simply because he does not know 
what they are. 

Appellant stoutly maintains that the granting of 
overtime to Mr. Belfield is a great injustice to the 
employer, since Mr. Belfield had become entitled to a 
"guaranteed" monthly salary and anything more 
would be a windfall. The amount of the judgment, 
$4249.76, includes one-half the amount as a penalty. 
The remaining one-half was payment for 591 hours 
of overtime pay which the company wrongfully with- 
held from Mr. Belfield. The magic of this argument 
seems to be in the word "guarantee." But whom did 
it guarantee, Mr. Belfield, or the appellant? Mr. Bel- 
field had never earned less than the amount they were 
offering as salary and frequently earned far more. 
The "guaranteed" salary only guaranteed the Web- 
ster-Brinkley Co. that it would not have to pay over- 
time to Mr. Belfield, that is, unless this Court compels 



18 

them to do so. The Wage and Hour Act was to cir- 
cumvent the making of profits from extra burdens be- 
ing wrongfully placed upon labor. 

We know that there are still those who out of greed 
for gain do not shame to oppress the workingman, 
for the lust is so powerful that it deranges their 
sense of justice and they fall an easy prey to low de- 
sires, and finally hold that all means are good which 
enable them to increase their profits. War contracts 
have always been a source of easy returns. Any cor- 
poration quickly formed and quickly dissolved, with 
its divided responsibility and limited liability, with no 
heart and no conscience, and with its memory only a 
filing cabinet, can always be made a suitable instru- 
mentality for man's exploitation. History is replete 
with the examples of the abominable abuses practiced 
under the corporate structure where divided respon- 
sibility hardens men against the sting of conscience 
and leaves them only the unquenchable thirst, "to 
show a profit. ,, To liken such an organization to a 
single employer with a few workingmen, who has 
from a lifetime of unremitting toil amassed a modest 
fortune, and ask the same measure of justice in its 
own behalf, is an insult to intelligence. The law is 
the only curb to such avarice and needs above all to 
be fearlessly and with unwearing zeal enforced. It 
would be a grave injustice to let the 1947 Portal-to- 
Portal Act relieve the appellant from an obligation 
rightfully imposed, or send the case back to the Dis- 
trict Court for further trial, for to do so would only 
wear down the appellee with endless and fruitless 
litigation. 



19 

We believe the proper disposition of this case is to 
affirm the judgment. 

Respectfully submitted, 

Charles H. Heighton, 
Leo W. Stewart, 

Attorneys for Appellee. 



No. 11682 

Wnittb States 

Circuit Court of &ppeate 

jfor ttje J2mtf) Circuit 



MATTHEW WRUBLEWSKI, 

Appellant, 

vs. 

CAPTAIN S. X. McINERNEY, 

Commanding Officer of United States Naval 
Receiving Station, Yerba Buena Island, San 
Francisco, California, and Rear Admiral D. B. 
Beary, United States Navy, Commandant 
12th Naval District, San Francisco, California. 

Appellee. 



transcript of &ecorb 



Upon Appeal from the District Court of the United States 

for the Northern District of California, -,%*•* 

Southern Division 

°AUL P. O'BRIEN^ 
-^PU 

Rotary Colorprint, 870 Brannan Street, Son Francisco 9-5-47—60 



No. 11682 

(Hmteb States 

Circuit Court of Appeals 

Jfor tt?e i^tnti) Circuit 



MATTHEW WRUBLEWSKI. 

Appellant, 

vs. 

CAPTAIN S. X. McIXERNEY, 

Commanding Officer of United States Naval 
Receiving Station. Yerba Buena Island. San 
Francisco, California, and Rear Admiral D. B. 
Bear\\ United States Navy, Commandant 
12th Naval District, San Francisco, California. 

Appellee. 



Cranscript of Eecorb 



Upon Appeal from the District Court of the United States 

for the Northern District of California. 

Southern Division 



Rotary CotorDrint, 870 Brannar S*'eer. Sc- Fnc 9-5-47 — 60 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record 
are printed literally in italic; and, likewise, cancelled matter appear- 
ing in the original certified record is printed and cancelled herein 
accordingly. When possible, an omission from the text is indicated by 
printing in italic the two words between which the omission seems to 
occur.] 

Appeal : 

Notice of 21 

Designation of Record on 22 

Certificate of Clerk to Transcript of Rec- 
ord on 24 

Designation of Points Relied on by Appel- 
lant on L'f) 

Appellant's Designation of Record on. . . . 29 
Appellant's Designation of Parts of the Record 

on Appeal That Is To Be Printed 29 

Certificate of Clerk to Transcript of Record on 

Appeal 24 

Designation of Points Relied on by Appellant 

on Appeal 25 

Designation of Record on Appeal 22 

Motion to Dismiss Petition for Writ of Habeas 

Corpus 14 

Names and Addresses of Attorneys 1 

Notice of Appeal 21 

Opinion 16 

Order Dismissing Petition for Writ of Habeas 
Corpus and Order to Hold Petitioner Within 
the Jurisdiction of This Court Pending Ap- 

I >eal 15 

Order Extending Time to Docket 23 

Order to Show Cause Why Writ of Habeas 

Corpus Should Not Issue 13 

Petition for Writ of Habeas Corpus 2 



NAMES AND ADDRESSES OF ATTORNEYS 

J. W. EHRLICH, 
EDWIN S. WILSON, 

512 De Young Building, 
San Francisco, California, 

Attorneys for Petitioner and Appellant. 

FRANK J. HENNESSY, 

United States Attorney, 
Northern District of California, 
Post Office Building, 
San Francisco, California, 

Attorney for Respondents and Appellees. 

On appeal from the United States District Court 
for the Northern District of California, South- 
ern Division. 

Decision of the Honorable Louis E. Goodman, 
District Judge. 



2 Matthew Wrublewski vs. 

In the District Court of the United States, Northern 
District of California, Southern Division 

No. 26862-G 

In the Matter of 

MATTHEW WRUBLEWSKI, Ensign, U. S. N., 

Petitioner. 

PETITION FOR WRIT OR HABEAS CORPUS 

To the Honorable, the Judge the United States 

District Court, Northern District of California, 

Southern Division: 

Now comes petitioner and files this his petition 

for a writ of habeas corpus and alleges as follows, 

to- wit : 

I. 

That petitioner is a citizen of the United States 
of America and is of the age of 25 years. [1*] 

II. 

That petitioner is illegally detained, unlawfully 
imprisoned, confined and restrained of his liberty 
at the United States Naval Receiving Station, 
Yerba Buena Island, San Francisco, California, 
which said naval station is under the command of 
Captain S. X. Mclnerney, commanding officer of 
said station, and Rear Admiral D. B. Beary, United 
States Navy, Commandant, 12th Naval District, 
San Francisco, California ; that said station wherein 
your petitioner is now confined is located in the 
County of San Francisco, within this district; that 



* Page numbering appearing a: :co: of pa^e o: original certified 
Transcript of Record! 



Capt. S. X. Mclnemey, et. a/. 3 

such de aement, restraint and imprison- 

ment and earli of such acts is unlawful, illegal and 
without authority of law for the reasons herein- 
after set forth: 

That petitioner is an officer of the regular Navy, 
Ensign, U.S.N., having enlisted in the naval service 
of the United States on September 12, 1939, as an 
apprentice seaman; that petitioner has served con- 
tinuously, honorably, efficiently, and dangerously 
throughout World War II as a combat pilot in the 
Naval Air Corps ; that petitioner was commissioned 
as an ensign in the regular navy in August of 1943, 
after serving four years as an enlisted man with a 
conduct record free from blemish; that all marks 
received by petitioner in his naval career from 
September, 1939, until August, 1944, were never 
less than 3.5 out of a possible 4.0 perfect rating in 
conduct, proficiency in rating, seamanship, mechani- 
cal ability and ability as a leader of men. 

That on or about December 11, 1944, petitioner 
was duly tried before a naval general court martial 
convened by the Commandant, 14th Naval District, 
Pearl Harbor, Territory of Hawaii, for the follow- 
ing offenses: (1) Murder 

"In that Matthew Wrublewski, Ensign, U. S. 
Navy, while so serving with patrol squadron two 
hundred, Fleet Air Wing Two, U. S. Pacific Fleet, 
did, on or about August 7, 1944, at the U. S. Naval 
Air Station, Kaneohe Bay, Oahu, Territory of 
Hawaii, wilfully, feloniously, with malice afore- 
thought, and without justifiable -cause, assault, 



4 Matthew Wrublewski vs. 

shoot at, [2] and strike with a bullet fired by him, 
the said Wrublewski, from a deadly weapon, to-wit, 
from a loaded Smith and Wesson revolver, calibre 
thirty-eight, one Roland F. Travis, lieutenant 
(junior grade), U. S. Naval Reserve, and did therein 
and thereby then and there inflict a mortal wound 
in and upon the chest of the said Travis, of which 
said mortal wound so inflicted, as aforesaid, the 
said Travis died at or about 7:15 p.m., on August 
7, 1944, the United States then being in a state of 
war." 

(2) Assault with intent to commit murder 

Specification I 

"In that Matthew Wrublewski, Ensign, U. S. 
Navy, while so serving with patrol squadron two 
hundred, Fleet Air Wing Two, U. S. Pacific Fleet, 
did, on or about August 7, 1944, at the U. S. Naval 
Air Station, Kaneohe Bay, Oahu, Territory of 
Hawaii, wilfully, maliciously, and without justifi- 
able cause, assault with a revolver one Roland F. 
Travis, lieutenant (junior grade), U. S. Naval Re- 
serve, with the intent in him, the said Wrublewski, 
to kill and murder the said Travis, the United States 
then being in a state of war." 

Specification II 

"In that Matthew Wrublewski, Ensign, U. S. 
Navy, while so serving with patrol squadron tw T o 
hundred, Fleet Air Wing Two, U. S. Pacific Fleet, 
did, on or about August 7, 1944, at the U. S. Naval 
Air Station, Kaneohe Bay, Oahu, Territory of 



Capt. S. X. Mclnem&y, et. cd. 5 

Hawaii, wilfully, maliciously, and without justifi- 
able cause, assault with a revolver, one Robert M. 
Nason, lieutenant (junior grade), U. S. Naval Re- 
serve, with the intent in him, the said Wrublewski, 

to kill and murder the said Nason, the United States 
then being in a state of war." 

Specification III 

"In that Matthew Wrublewski, Ensign, U. S. 
Navy, while so serving with patrol squadron two 
hundred, Fleet Air Wing Two, IT. S. Pacific Fleet, 
did, on or about August 7, 1944, at the U. S. Naval 
Air Station, Kaneohe Bay, Oahu, Territory of 
Hawaii, wilfully, maliciously, and without justifi- 
able cause, assault with a revolver one Joseph A. 
Osborn, then lieutenant (junior grade), U. S. Naval 
Reserve, with the intent in him, the said Wrublew- 
ski, to kill and murder the said Osborn, the United 
States then being in a state of war." 

Following said trial, the naval court found the 
accused guilty of the charge of murder and the 
specification thereunder proved; the same court 
acquitted the accused of the second charge of assault 
with intent to commit murder and found the words 
of the three specifications thereunder not proved. 

That the naval court martial had no jurisdiction 
over the crime of murder, which alleged " murder' 3 
was "not committed [3] without the territorial 
jurisdiction of the United States" in that said 
alleged "murder" was not alleged to have been 
committed aboard a vessel of the United States on 



6 Matthew Wrublewski vs. 

the high seas; that despite the lack of jurisdiction 
of the court over the charge of murder and further 
despite the acquittal of the accused on the charge 
of assault with intent to commit murder, petitioner 
has been confined in various naval prisons both in 
the Pacific area and within the continental limits 
of the United States, continuously from August 7, 
1944, and is still so confined as an officer prisoner 
at the United States Naval Receiving Station, 
Yerba Buena Island, San Francisco, California. 

That on November 9, 1945, a letter was originated 
by the Judge Advocate General's office, Washington, 
D.C., to the Bureau of Naval Personnel, calling 
attention to the fact that the trial, proceedings, 
findings and sentence should be set aside as void for 
lack of jurisdiction over the crime. This letter, 
or "read-off," was made known to your petitioner 
on February 13, 1946, over 18 months after peti- 
tioner was placed in confinement; that following 
this review by the Judge Advocate General's office, 
which determined the illegality of the trial for 
murder and the sentence resulting therefrom, peti- 
tioner was not restored to duty as a naval officer, 
and was not released from confinement or prison, 
was not ordered to a new trial, and otherwise de- 
rived no benefit whatsoever from the decision by 
higher naval authority that his trial, the proceed- 
ings, findings and sentence were all void as to the 
first charge of murder from inception. Petitioner 
was then transferred to the United States Naval 
Hospital, Oakland, California, for " observation" 



Capt. S. X. Mclnerney, et. al. 7 

and was there confined in a prisoner status withoul 
the liberty to leave the building or to place a tele- 
phone call concerning his predicament. This period 

of observation resulted in petitioner being pro- 
nounced sane, sound, and fit for duty. Following 
a period of observation at [4] the United States 
Naval Hospital. Oakland, California, petitioner was 
transferred back to the navy prison from which he 
came and was confined as a regular convicted 
criminal. Petitioner was sentenced to ten years' 
imprisonment as a result of the herein mentioned 
void trial proceedings; that petitioner has already 
been imprisoned for over 30 months. 

III. 

That your petitioner, at his first opportunity, 
sought relief through the offices of the 12th Naval 
District to be transferred out of this prison to some 
quarters and duty more appropriate to an officer 
of the navy who had up to that time been convicted 
of nothing. 

Your petitioner has through his counsel sought to 
derive some benefit from the application of the rule 
that petitioner is innocent at least until he walks 
into the Naval General Court Martial. 

IV. 

That on or about April 3, 1946, your petitioner 
was still confined as a convicted prisoner at the 
United States Naval Prison, Mare Island, Cali- 
fornia, petitioner was under no pending charges 
and was serving a "sentence" as the result of a 



8 Matthew Wrublewski vs. 

void trial and conviction of the charge of murder. 
Your petitioner sought relief in this honorable court 
on a petition of writ of habeas corpus. This action 
brought forth the charges and specifications by the 
Navy Department showing cause why petitioner 
was restrained. A charge of scandalous conduct 
tending to the destruction of good morals was then 
1946. Your petitioner waited from that date until 
July 25, 1946, at which time the charge under which 
petitioner was being held was withdrawn by the Navy 
Department and new charges were finally preferred 
against petitioner, namely, voluntary manslaughter 
and a second charge, involuntary manslaughter, as 
herein [5] set forth : 

Charge I 

Voluntary Manslaughter 

Specification 

"In that Matthew Wrublewski, Ensign, U. S. 
Navy, while so serving with Patrol Squadron Two 
Hundred, Fleet Air Wing Two, U. S. Pacific Fleet, 
did, on or about 7 August 1944, at the IT. S. Naval 
Air Station, Kanoehe Bay, Oahu, Territory of 
Hawaii, feloniously, wilfully, without justifiable 
cause, assault, shoot and strike with a bullet fired 
by him, the said Wrublewski, from a deadly wea- 
pon, to-wit, from a loaded Smith and Wesson thirty- 
eight calibre revolver, one Rowland F. Travis, 
lieutenant (junior grade), TJ. S. Naval Reserve, 
and did therein and thereby, then and there, in- 
flict a mortal wound in and upon the chest of the 



Capt. S. X. Mclnerney, et, al. 9 

s id Travis, of which said mortaJ wound so inflicted 
as aforesaid, the said Travis died at about 1915 on 7 
August 1944; the CJnited States then being in a 

state of war." 

Charge II 

Involuntary Manslaughter 

Specification 

"In that Matthew Wrublewski, Ensign, U. S. 
Navy, while so serving with Patrol Squadron Two 
Hundred, Fleet Air Wing Two, U. S. Pacific Fleet, 
having in his possession a loaded Smith and Wesson 
thirty-eight calibre revolver, and it being his duty 
to handle said revolver with due caution and cir- 
cumspection, did, on or about 7 August 1944, at the 
U. S. Naval Air Station, Kanoehe Bay, Oahu, 
Territory of Hawaii, feloniously neglect and fail 
to handle said revolver with due caution and cir- 
cumspection, in that he, the said Wrublewski, did 
cause said revolver to be discharged, and did assault 
and strike in and upon the chest with a bullet fired 
from said revolver by means of said discharge, one 
Rowland P. Travis, lieutenant (junior grade), U. S. 
Naval Reserve, and did therein and thereby, then 
and there, mortally wound the said Travis, as a 
result of which said mortal wound so inflicted as 
aforesaid he, the said Travis, at or about 1915 on 7 
August 1944, at said station did die; the United 
States then being in a stale of war." 

That petitioner was brought to trial on July 30, 
1946, on the above charges. That your petitioner 

through his counsel duly entered a plea in bar of 



10 Matthetv Wrublewski vs. 

trial on the ground that the accused had once been 
acquitted of assault with intent to commit murder 
by a duly constituted court. That the previous 
acquittal involved the same person named in the 
specifications for which the accused was tried; 
namely, Lieutenant (junior grade) Roland F. 
Travis, U. S. Naval Reserve. It was alleged that 
the crime of assault with intent to commit murder 
was a lesser included offense of manslaughter and 
therefore an acquittal of the lesser crime is a bar 
to a subsequent prosecution for the greater crime. 
This plea in [6] bar was denied by the Naval Gen- 
eral Court Martial and the trial of petitioner pro- 
ceeded, resulting in a conviction of the charge of 
voluntary manslaughter and an acquittal of invol- 
untary manslaughter. 

V. 

That during the trial of the question of former 
jeopardy, the principle defense to the accused's 
plea in bar consisted of a written opinion by the 
Judge Advocate General of the Navy, which opinion 
usurped the prerogative of the trial court by stating 
that this present trial would not constitute former 
jeopardy. That said opinion of the Judge Advocate 
General was untimely in light of the fact that this 
high naval office is the ultimate reviewing authority 
of the trial court's proceedings and to dictate its 
opinion in a case prior to the accused having oppor- 
tunity to present his argument to the trial court, 
was highly prejudicial to the interests of the accused 
and deprived him of his right of review. 



Capt. S. X. Mclnerney, et. al. 11 

VI. 

That petitioner was tried by General Court Mar- 
tial, Twelfth Naval District, on July 30, 1946; that 
since said date of trial to the present date, namely, 
February 6, 1947, petitioner has been restricted to 

U. S. Naval Training and Distribution Center, 
Treasure Island, San Francisco, California. This 
period of time, approximately seven months, has 
been spent in waiting for the Navy Department to 
review the record of proceedings. 

That the final decision of the Navy Department 
is to confirm the findings of the court, namely, find- 
ings of guilty to voluntary manslaughter and the 
sentence under which the petitioner is now serving 
is five years at hard labor. 

VII. 

That the Naval General Court Martial had no 
jurisdiction over the crime of manslaughter for 
which the accused was tried and convicted because 
there had been an acquittal of a lesser included 
offense by a duly constituted Naval General Court 
Martial. 

That the proceedings, finding and sentence of the 
• urt in its second trial of the accused are void. [7] 

That the reviewing authority of the Navy was 
without a right to issue an opinion on this case 
prior to its trial. 

Wherefore, your petitioner prays that a writ of 
habeas corpus issue, that a return date be set; that 



12 Matthew Wrublewski vs. 

your petitioner be restored to his liberty and the 
status of an officer of the United States Navy. 

Respectively submitted, 

EDWIN S. WILSON, 

Attorney for Petitioner. [8] 

State of California, 

City and County of San Francisco — ss. 

Edwin S. Wilson, being first duly sworn, deposes 
and says: 

That he is an attorney at law, duly licensed to 
practice in the United States Federal Courts; that 
he is one of the attorneys for the petitioner in the 
foregoing petition; that he makes this vertification 
on behalf of said petitioner for the reason that 
petitioner is absent from the place where affiant 
has his office, to-wit, the City of San Francisco; 
that he has read said petition and knows the con- 
tents thereof; that the same is true of his own 
knowledge, except as to the matters therein stated 
on information or belief, and as to those matters he 
believes it to be true. 

EDWIN S. WILSON. 
Subscribed and sworn to before me this 6th dav 
of February, 1946. 

[Seal] L. H. CONDON, 

Notary Public in and for the City and County of 
San Francisco, State of California, 

(Here follows memorandum of points and 
authorities.) [9] 



Capt. S. X. Mclnerney, et. al. 13 

[Title of District Court and Cause.] 

ORDER TO SHOW CAUSE WHY WRIT OF 
HABEAS CORPUS SHOULD NOT ISSUE 

Good cause appearing therefor and upon leading 
the verified petition on file herein, it is hereby 
ordered that Captain S. X. Mclnerney, Com- 
manding Officer of United States Naval Receiving 
Station, Yerba Buena Island, San Francisco, Cali- 
fornia, and Rear Admiral D. B. Beary, United 
States Navy Commandant, 12th Naval District, San 
Francisco, California, or whomsoever is or are 
charged with the custody of Matthew Wrublewski, 
Ensign, U.S.N., appears before this court on the 
24th day of February, 1947, at the hour of 10:00 
o'clock a.m. of said day, or as soon thereafter as 
said matter can he heard, at the court room thereof 
of the undersigned in room 265, Post Office Build- 
ing, 7th and Mission streets, San Francisco, Cali- 
fornia, to show cause why a write of habeas corpus 
should not issue herein as prayed for, 

It Is Hereby Further Ordered that a copy of this 
order be served upon said Captain S. X. Mclnerney 
and Rear Admiral D. B. Beary or whomsoever is 
or are charged with the custody of Matthew Wrub- 
lewski, Ensign, U.S.N., by leaving a copy with 
them, together Avith a copy of the petition herein, 
and that a copy [12] of said order and a copy of the 



14 Matthew Wrubletvski vs. 

petition herein be served upon the United States 
District Attorney for this district forthwith. 

Dated February 6th, 1947. 

LOUIS E. GOODMAN, 

Judge. 

[Endorsed] : Filed Feb. 6, 1947. [13] 



[Title of District Court and Cause.] 

MOTION TO DISMISS PETITION FOR 
WRIT OF HABEAS CORPUS 

Come now Captain S. X. Mclnerney, Command- 
ing Officer of United States Naval Receiving Sta- 
tion, Yerba Buena Island, San Francisco, California, 
and Rear Admiral D. B. Beary, United States Navy 
Commandant, 12th Naval District, San Francisco, 
California, and move this Honorable Court to dis- 
miss the petition for write of habeas corpus for the 
reason that the said application fails to state a cause 
of action upon which relief can be granted. 

Dated February 24, 1947. 

FRANK J. HENNESSY, 
United States Attorney. 

JOSEPH KARSH, 

Assistant U. S. Attorney, 
Attorneys for Respondents. 



Capt. S. X. Mclnemey, et. <il. 15 

Dig ! United States. Northern 

Distrid fo California, Southern Division 

At a Stated Term of the District Court of the 
United States for the Northern District of Cali- 
fornia, Southern Division, held at the Courl Room 
thereof, in the City and County of San Francisco, 
on Wednesday, the 2nd day of April, in the year of 
our Lord one thousand nine hundred and forty- 
seven. 

Present: The Honorable Louis E. Goodman, Dis- 
trict Judge. 

No. 26862-G Civil 

In the Matter of 

MATTHEW WRUBLEWSKI, Ensign, U.S.N., 
on Petition for a Writ of Habeas Corpus. 

ORDER DISMISSING PETITION FOR WRIT 
OF HABEAS CORPUS AND ORDER TO 
HOLD PETITIONER WITHIN THE JUR- 
ISDICTION OF THIS COURT PENDING 
APPEAL 

This case came on regularly this day for hearing 
of respondent's motion to dismiss the petition for a 
writ of habeas corpus. Edwin Wilson, Esq., attor- 
ney for petitioner, and Joseph Karesh, Esq., Assist- 
ant U. S. Attorney, for respondent, were present. 
It Is Ordered that said petition be dismissed in 
accordance with the motion to dismiss, as will more 
fully appear in a written opinion this day filed. On 
motion of Mr. Wilson, petitioner's intention to take 



16 Matthew Wrublewski vs. 

an app I i noted in the record and respondent is 
lered to hold petitioner within the jurisdiction of 
this Court pending appeal herein. [35-a] 



[Title of District Court and Cause.] 

OPINION 

Goodman, District Judge. 

Petitioner, an officer of the United States Navy, 
seeks by his petition for the writ of habeas corpus 
to be released from the custody of naval authorities 
who hold him at the United States Keceiving Sta- 
tion, Yerba Buena Island, in this district, after his 
conviction on July 30, 1946, by a -court martial of 
the crime of voluntary manslaughter and subsequent 

ntence to five years imprisonment. [36] The court 
issued an order directing the commanding officers 

the Receiving Station to show cause why the writ 
should not issue. Respondents then moved to dis- 
miss the petition. After argument and the filing of 
briefs, the motion has been submitted for decision. 

It appears from the petition that petitioner, on 
December 11, 1944, was tried before a Naval General 
I >urt Martial at Pearl Harbor, Hawaii, for two 
offenses, to-wit: The crime of murder alleged to 
en committed on or about August 7, 1944, 
at the U. S. Naval Air Station, Oahu, Hawaii, and 
the crime of assault with intent to -commit murder 
alleged to have been committed at the same time and 

ice upon the same victim. The Naval Court 



( 'i pi. s. X. Mclnerney, et. al. 17 

ad. titioner guilty of murder and ii<> ! guilty 

of the charge of assault with intent to commil 
murder. 

Upon review of the judgment, the Judge Advocate 
General, on Nov. 9, 1945, declared the judgmenl and 
sentence for the crime of murder illegal, in that the 
same was committed "within the territorial juris- 
diction of the United States'' and thus beyond the 
jurisdiction of that court martial.* Petitioner was 
not, however, released from custody. On July 30, 
1946, petitioner was brought to trial before another 
Naval General Court Martial upon two charges, 
to- wit, voluntary manslaughter and involuntary 
manslaughter. Both charges specified the same 
homicide for which petitioner was tried in the 1944 
court martial. Conviction of the charge of volun- 
tary manslaughter and sentence to five years im- 
prisonment followed. 

At his trial on the manslaughter charges, peti- 
tioner pleaded "former jeopardy,'' in that he had 
previously (in 1944) been acquitted of the crime 
of assault with intent to [37] commit murder upon 
the same victim. In support of this plea, petitioner 
alleged that the crime of assault with intent to 
commit murder was a lesser included offense of the 
crime of manslaughter and that acquittal of the 
former barred subsequent prosecution for the 



*Naval Courts Martial have jurisdiction of 
crime of murder only when committed outside 1 
territorial jurisdiction of the U.A. 34 USC s 1200 
Art. 6. 



18 Matthew Wrublewski vs. 

se. The court martial overruled the 
plea and the judgment was later confirmed by the 
Jv Advocate General. 

Because of the alleged "former jeopardy.*' 
(Tons;. Amdt. V.) petitioner claims the Navy court, 
in the 1946 trial, was without jurisdiction and hence 
the writ should issue. 

Unless it appears that the Navy court lacked 
ju is ii. this court may not review its judgment. 

U. S. v. Grimley, 137 U. S. 147; Swaim v. U. S. 165 
U. S. 553: Mullan v. U. S. 212 U S. 516; Ex parte 
Mason, 105 U. S. 696; Ex parte Reed, 100 U. S. 13; 
Carter v. McClaughry, 183 U. S. 365. To resolve 
the jurisdictional issue, it is not necessary to decide 
whether a court martial conviction of the crime of 
manslaughter, where there 4 has been a previous trial 
of the crime of assault with intent to commit mur- 
der, amounts to double jeopardy. This is for the 
reason that the specific guarantees of the 5th amend- 
ment to the ( Ltution relating to criminal pros 
curious may not he invoked in "cases arising in the 
land i 1 forces" of the United States. Ex 
parte Quirin, 317 U. S. 43; Ex parte Milligan, 71 
T. S. 2, 123 ; U. S. ex rel limes v. ( irystal (2 ( !ir.) 131 
Fed. (2d) 576; Ex parte Benton, 63 Fed. Supp. 808. 
The Naval court's decision denying the plea of 
double jeopardy may have 1 been erroneous. But 
s of law by courts martial are not i 
able or <• itible in the civil 

arts They • be reviewed here only if th< 
are uch a nature as to amount to a breach of the 



Capt. 8. X. Mclnerney, <l. al. ' I 

i • 
eh i of the [38] ( 
Naval courl of jurisdiction. U. s. v. Ei 
1 U Fed. 2 ' te Benton, 

"to in the military or naval servia 

United Starr-, the military law is due procf>-.' 

Reaves v. Ainsworth, 219 U. 8. 304. (Empha 

I). ion. therefore, is: Was the 

tr( Lven by the :t so 

"unfair" as • institute lack of due process un< 
military law .' 

Petitioner was represented by counsel during both 
«•■ rfe martial. No cli im is made of any unfairn< 
in the conduct of his trials. It is not claimed that 

he was denied the right to produce witnesses or to 
cross examine witnesses. Nor is any conduct of the 
court itself complained of. The contentions made 
here were urged, both at his second court martial 
and upon review by the Judge Advocate General. 
They were determined adversely to him. Under 
military law, the decisions may have been wrong. 
But we may correct them here, only if the errors 
amount ' lenial of due pro< — . 

It is a i able inference, as it would be in the 

civil courts, that the charge of assault with intent 

to commit murder was added to the charge of mur- 

• the first court martial in order to provide for 

the exigencies >roof. Obviously acquittal of the 

nature of a dismissal of 
that charge, b - of the finding [juill of 

murder. The en cord of p< 



20 Matthew Wrubleivski vs. 

negatives the assumption that he may have been 
acquitted of assault with intent to commit murder 
due to a lack of the required degree of proof to 
establish the commission by him of any assault upon 
the deceased at all, or of an intent to kill. Indul- 
gence in this assumption would require complete 
disregard of the fact that the court martial believed 
and found him guilty of the greater crime of [39] 
murder. 

Nothing in the record presented by the petition 
indicates a violation of the basic doctrine of fair- 
ness. It is true that much fumbling and delay by 
the Naval authorities is disclosed. At least, from 
the civil viewpoint, it may he so characterized. But 
I may not issue the write for such reasons. In fact, 
nothing about this case bestirs any judicial urge to 
invoke the great writ of habeas corpus. Moreover, 
it may not be amiss to point out that the plight of 
petitioner, under all the circumstances, is not too 
unfortunate. Indeed lie may have been more 
s verely der.lt with in the first instance had not the 
Naval authorities made the .jurisdictional mistake 
of him with murder. 

My conclusion is that the showing made fails to 
demonstrate a breach of the broad and basic doc- 
trine of fairness under the due process clause. 

The motion to dismiss the petition for a writ of 
habeas corpus is granted and the petition is dis- 
missed. 

Dated April 1, 1947. 

[Endorsed]: Piled April 2, 1947. [40] 



Capt. S. X. Mclnem&y, (I. al. 

hi the United States District Court for the Northern 

District of California, Southern Division 

No. 26862-G 

In the Matter of 

MATTHEW WRUBLEWSKI, Ensign, U.S.N., 

Petitioner. 

Notice Is Hereby Given That Matthew Wrub- 
lewski, the petitioner above-named, does hereby 
appeal to the Circuit Court of Appeals for the Ninth 
Circuit from the opinion made and entered against 
him in this action on the 1st day of April, 1947, 
and from each and every part thereof. 

EDWIN S. WILSON, 

Attorney for Petitioner. 

[Endorsed] : Piled April 15, 1947. [41] 



22 Matthetv Wrublewski vs. 

In the United States District Court for the Northern 
District of California, Southern Division 

No. 26862-G 

In the Matter of 

MATTHEW WRUBLEWSKI, Ensign, U.S.N., 

Petitioner. 

DESIGNATION OF RECORD ON APPEAL 

To the Clerk of the United States District Court for 
the Northern District of California, Southern 
Division: 

It is respectively requested that the following be 
submitted to the Clerk of the United States Circuit 
I ' eals for the Ninth Circuit: 

1. Petition for Writ of Habeas Corpus filed 
February 6, 19-17. 

2. Order to Show Cause Why Writ of Habeas 

1 pus Should Not Issue. 

3. Petitioner's Memorandum of Points and 

Authorities. 

4. Supplementary Memorandum of Points and 
Authorities. 

5. Respondent's Memorandum to Dismiss Peti- 
tion for Writ of Habeas Corpus. 

6. Respondent's Supplementary Memorandum. 

7. Respondent's Amendments to Original Mem- 
tndum. 



Capt. S. X. Mclnerney, et. ai. 23 

>. Petitioner's Memorandum in Answer to Re- 
spondent's Supplementary Memorandum. 

EDWIN S. WILSON, 
J. W. ERHLICH, 

Attorneys for Petitioner. 

[Endorsed] : Filed May 12, 1947. [42] 



In the Southern Division of the United States 
District Court for the Northern District of 
California 

No. 26862-G 

In the Matter of 

MATTHEW WRUBLEWSKI, U. S. N., 

Petitioner. 

ORDER EXTENDING TIME TO DOCKET 

Good cause appearing therefor, it is hereby 
Ordered that the defendant and Appellant herein 
may have to and including July 3, 1947, to file the 
Record on Appeal in the United States Circuit 
Court of Appeals in and for the Ninth Circuit. 

Dated Mav 23, 1947. 

LOUIS E. GOODMAN, 

United States District Judge. 

[Endorsed]: Filed May 23, 1947. [43] 



24 Matthetv Wrublewski vs. 

District Court of the United States 
Northern District of California 

CEETIFICATE OF CLEEK TO TRANSCRIPT 
OF RECORD ON APPEAL 

I, C. W. Calbreath, Clerk of the District Court of 
the United States, for the Northern District of 
California, do hereby certify that the foregoing 44 
pages, numbered from 1 to 44, inclusive, contain a 
full, true and correct transcript of the records and 
proceedings in the Matter of Matthew Wrublewski, 
on Petition for Writ of Habeas Corpus No. 26862-G, 
as the same now remain on file and of record in 
my office. 

I further certify that the cost of preparing and 
certifying the foregoing transcript of record on 
appeal is the sum of $4.70 and that the said amount 
lias been paid to me by the attorney for the appel- 
lant herein. 

In Witness Whereof, I have hereunto set mv hand 
and affixed the seal of said District Court at San 
Francisco, California, this 1st day of July, A.D. 
1947. 

[Seal] C. W. CALBREATH, 

Clerk. 

M. E. VAN BUREN, 
Deputy Clerk. [44] 



Capt. S. X. Mclnerney, </. al. 25 

[Endorsed]: No. 11682. United Stales Circuit 
Courl of Appeals for the Ninth Circuit. Matthew 
Wrublewski, Appellant, vs. Captain S. X. Mclner- 

ney, Commanding Officer of United States Naval 
Receiving Station, Yerba Buena Island, San Fran- 
cisco, California, and Rear Admiral D. B. Beary, 
United States Navy Commandant, 12th Naval Dis- 
trict, San Francisco, California, Appellees. Tran- 
script of Record. Upon Appeal from the District 
Court of the United States for the Northern District 
of California, Southern Division. 

Filed July 9, 1947. 

PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



In the United States Circuit Court of Appeals 
For the Ninth Circuit 

No. 11682 

MATTHEW WRUBLEWSKI, Ensign, U.S.N., 

Appellant, 

vs. 

UNITED STATES OF AMERICA, 

Respondent. 

DESIGNATION OF POINTS RELIED ON BY 
APPELLANT ON APPEAL 

Comes now Matthew Wrublewski, the appellant 
in the above entitled matter, through his attorneys, 



26 Matthew Wriiblewski vs. 

J. W. Ehrlich and Edwin S. Wilson, and designates 
and states that he adopts as his points to be relied 
on on appeal as follows : 

1. That the Writ of Habeas Corpus should have 
been granted and appellant, Matthew Wrublewski, 
discharged from custody and confinement at the 
XL S. Naval Disciplinary Barracks, Yerba Buena, 
San Francisco, California. 

2. That the Court had jurisdiction to issue the 
writ of Habeas Corpus as prayed for in the petition 
on file herein. 

3. That the type of errors -committeed by the 
Naval General Court Martial in its second trial of 
appellant are the type of errors which may be 
corrected by the Court. 

4. That the guarantees of the Fifth Amendment 
to the Constitution may be invoked in cases con- 
cerning members of the U. S. Navy. 

5. That where there has admittedlv been error 
committed by a Naval General Court Martial in 
permitting a citizen of the United States to be tried 
twice for the same offense, or lesser included offenses 
therein, our Federal Courts have jurisdiction to 
correct such errors. 

6. That appellant made claim of misconduct on 
the part of General Court Martial in his petition 
on file 1 herein and that said claim of misconduct on 
the part of the Naval Court was by-passed by the 
United States District Court: to-wit: It was com- 
plained of by appellant that the Naval Court erred 



Capt. S. X. Mcfm -nicy, et. al. 27 

in considering a certain letter from the Judge 

Advocate General's office, in which the latter issued 
its decision on the question of double jeopardy he- 
fore the Court was given an opportunity to consider 
this important fact; that such conduct on the part 
of the Judge Advocate General in issuing a state- 
ment to the Court biased its judgment and such 
subsequent action on the part of the Naval Court 
amounted to unfairness to the accused. 

7. That Naval Military Court is without juris- 
diction over a crime of which an accused has once 
been acquitted. 

8. That where a Naval General Court is ad- 
mittedly without jurisdiction of an offense, i.e., 
murder within the continental limits of the United 
States, any proceeding of such a court in its trial of 
such an offense is a nullity and cannot be considered 
by a second Naval Court Martial or any Court in 
guessing at what the first Naval Court Martial would 
have done had it not been in error trying the 
accused for murder, a charge over which that court 
had no jurisdiction. 

9. That in a trial of two separate charges, one 
of which the court lacks jurisdiction to hear, such 
failure of jurisdiction will not invalidate its find- 
ings from that charge over which it does have juris- 
diction and that the findings on any charge over 
which the duly constituted Court has jurisdiction 
cannot later be discarded on the excuse that if the 
Court had had jurisdiction over the second charge, 
the result would not have been the same in its find- 



28 Matthew Wrublewslxi vs. 

ings on the charge over which it did have jurisdic- 
tion. 

10. That the crime of assault with intent to 
commit murder is a lesser included offense of man- 
slaughter. 

11. That an acquittal of the crime of assault with 
intent to commit murder will preclude a subsequent 
trial involving the same victim and set of facts on 
a trial for manslaughter; that one found innocent 
as evidenced by an acquittal of an assault cannot 
later be tried for a homicide resulting from that 
same assault. 

12. That the Navy Department, contrary to said 
Articles of War, governing the Army and Navy, 
recognizes the guarantees of the Fifth Amendment 
to the Constitution and, therefore, the personnel of 
the IT. S. Navy may avail themselves of those 
guarantees. 

J. W. EHRLICH, 
EDWIN S. WILSON, 

Attorneys for Appellant. 

Receipt of a copy of the foregoing designation of 
points relied on by appellant on appeal is hereby 
acknowledged this 17th day of July, 1947. 

FRANK J. HENNESSY, 

United States Attorney. 

Per T. S. 



Capt. S. X. Mclnerney, et. ah 29 

In the United States Circuit Court of Appeals 

For the Ninth District 

No. 11682 

MATTHEW WRUBLEWSKI, Ensign, U.S.N., 

Appellant, 

vs. 

I NITED STATES OF AMERICA, 

Respondent. 

APPELLANT'S DESIGNATION OF PARTS 
OF THE RECORD ON APPEAL THAT IS 
TO BE PRINTED 

Comes now Matthew Wrublewski, the appellant 
in the above-entitled matter, through his attorneys, 
J. W. Ehrlich and Edwin S. Wilson, Esqs., pursuant 
to rule 19, paragraph 6, of the rules of this court 
designates the part of the record on appeal to be 
printed as follows: 
The entire record. 

J. W. EHRLICH, 
EDWIN S. WILSON, 

Attorneys for Appellant. 

Receipt of a copy of the foregoing Appellant's 
Designation of Parts of the Record on Appeal that 
is to be Printed is hereby acknowledged this 17th 
day of July, 1947. 

FRANK J. HENNESSY, 

U. S. Attornev. 

Per T.S. 



.8.T 



19*1 



No. 11,682 

IN THE 

United States Circuit Court of Appeals 

For the Ninth Circuit 



Matthew Win hlewski. 



Appellant, 



vs. 



Captain S. X. McInerney, Command- 
ing Officer of United States Naval 
Receiving Station, Yerba Buena 

Island, San Francisco, California, 
and Rear Admiral D. B. Beary, 

l/nited States Navy, Commandant 

12th Naval District, San Francisco, 

California, 

Appellee. 



y 



Upon Appeal from the District Court of the United States for 
the Northern District of California, Southern Division. 

OPENING BRIEF FOR APPELLANT. 




CT 

PAUL P f O'BRieN, -v 



Edwin S. Wilson, 

512 De Young Building, San I'Yancisco. 

Attorney for Appellant. 



I'EnNAf-WAi sh Printing Co.. San Francisco 



Subject Index 



Page 

Statement of the case 1 

Assignment of errors 4 

Argument 6 

Summary 6 

Double jeopardy clause of Fifth Amendment applies to 

Naval personnel 7 

Unfairness in conduct of second trial 23 

Acquittal of assault charge bar to prosecution for man- 
slaughter 24 

Conclusion 29 



Table of Authorities Cited 



Cases Pages 

Doggert v. State, 93 S. W. 399 28 

Ex parte Benton, 63 Fed. Supp. 808 8, 18 

Ex parte -Costello, 8 Fed. (2d) 386 13, 14 

Ex parte Lange, 18 Wall. 163 16 

Ex parte Milligan, 71 U. S. 2, 123 8 

Ex parte Quirin, 317 U. S. 43 8, 14 

Grafton v. U. S., 206 U. S. 333, 511 L. Ed. 1084, 27 S. Ct. 

749 7, 15, 22, 24, 27 

(Jraviers v. United States, 220 U. S. 338 25 

In re Nielson, 131 U. S. 176, 188 16, 25 

Kepner v. U. S., 195 U. S. 100 16 

Reaves v. Ainsworth, 219 U. S. 304 18 

Sanford v. Robbins (5th Cir., 1940), 115 Fed. (2d) 435. .. . 12 
State v. Hoot, 120 Iowa 238 28 

Tritico v. U. S, 4 Fed. (2d) 664 26 

U. S. v. Hiatt (3rd Cir.), 141 Fed. (2d) 664 10 

U. S. ex rel. Innes v. Crystal (2nd Cir.), 131 Fed. (2d) 576 8 

Federal Laws and Regulations 

40 Article of War (39 Stat. 657) 16 

102 Article of War (Comp. St. 2308A) 14 

Court Martial Order 141, 1918, p. 18 15 

Court Martial Order 2, 1928, p. 20 26 

Court Martial Order 8, 1929, pp. 14-15 16 

Court Martial Order 9, 1945, p. 399 (Rosborough v. Rossell) 19 

Naval Courts and Boards, Section 119 27 

Naval Courts and Boards, Sections 408-410 27 

Naval Courts and Boards, Section 649 ( now Section 408 ) . . 14 



Table of Authorities Cited iii 

Page 

1 Op. Am. Gen. 233 1,; 

U.S.C.A. Const. 5 7 

34 [J.S.C. 1200. Article 6 19 

Texts 

26 America]] Jurisprudence 270 28 



No. i !♦;-!_* 



IN THE 

United States Circuit Court of Appeals 

For the Ninth Circuit 



Matthkw Wrublewski, 



Appellant, 



vs. 



Captain S. X. McInerney, Command- 
ing Officer of United States Naval 
Receiving Station, Yerba Buena > 
Island, San Francisco, California, 
and Reab Admiral 1). B. Beary, 
United States Navy, Commandant 
12th Naval District, San Francisco, 

California, 

Appellee. 



Upon Appeal from the District Court of the United States for 
the Northern District of California, Southern Division. 

OPENING BRIEF FOR APPELLANT. 



STATEMENT OF FACTS. 

A detailed statement of the facts leading up to the 
filing of the petition for writ of habeas corpus is found 
in the transcript of record, pages 2-V1. Briefly, those 
fads may be summarized as follows: On December 
LI, L944, appellant was tried by a duly constituted 



Naval General Court Martial at Pearl Harbor, Ter- 
ritory of Hawaii, on two charges: 1, murder; one spe- 
cification thereunder alleging murder of one Lieu- 
tenant Roland S. Travis; 2, assault with intent to 
commit murder; with three specifications thereunder, 
the first specification of which alleges that appellant 
did assault with the intent to murder one Lieutenant 
Roland S. Travis. These charges are found in the 
transcript of record, pages 3, 4, and 5. This first 
Naval General Court Martial convicted appellant of 
the first charge, namely, murder, and acquitted appel- 
lant of the second charge, namely, assault with intent 
to commit murder, and each of the specifications there- 
under were found not proved. Appellant was acquitted 
of all charges except the first one of murder. The 
Judge Advocate General's office in Washington, in 
reviewing the proceedings, recognized the fact that 
the Naval General Court Martial did not have juris- 
diction over the charge of murder, as said alleged 
murder did not take place "without the continental 
limits of the L T nited States". Therefore, said convic- 
tion was void and the proceedings as to this charge 
alone was a nullity. 

Despite this realization that appellant stood con- 
victed of nothing, appellant was nevertheless con- 
fined in a prisoner status until July 30, 1946, at which 
time he was brought to trial a second time before a 
Naval General Court Martial on charges of: 1, volun- 
tary manslaughter, and 2, involuntary manslaughter, 
both alleging a homicide of Lieutenant Roland S. 
Travis, which specifications are found on pages 8 and 



9 of the Transcript of Record. This second trial was 
opposed by appellant in that he duly entered a plea in 
bar of trial establishing that he had previously been 
acquitted of assault with intent to commit murder 
by a court of competent jurisdiction, a lesser included 
offense of manslaughter; that such acquittal was a 
bar to any subsequent trial of any greater offense, 
which includes the 1 offense of assault. This plea in 
bar was denied and the trial resulted in conviction 
of appellant of the crime of voluntary manslaughter 
and he was eventually sentenced to serve five years at 
hard labor. It was following this conviction and sen- 
tence as approved by the U. S. Navy Department in 
Washington, 1). C, that appellant sought relief in the 
District Court of the United States, Northern District 
of California, Southern Division. Appellant filed his 
petition for writ of habeas corpus in the District Court 
contending that in, the first trial by a competent Naval 
General Court Martial at Pearl Harbor, that court, 
although lacking jurisdiction over the crime of mur- 
der, nevertheless had jurisdiction over the second 
charge of assault with intent to commit murder, of 
which charge appellant was acquitted and therefore 
the invalidity of proceedings as to the first charge did 
not affect the validity of the court's findings in the 
second charge. It was contended that the Fifth 
Amendment to the Constitution; namely that portion 
which states "nor shall any person be subject for the 
same offense to be twice put in jeopardy of life or 
limb", applied to the appellant. It is alleged that the 
Navy Department ignored this constitutional right of 



i 



appellant and therefore this question was one for con- 
sideration of the District Court. After filing- of briefs 
and arguments, the District Court issued an order 
dismissing petition for writ of habeas corpus. Appel- 
lant now seeks an interpretation of the above-quoted 
clause of the Federal Constitution. 



ASSIGNMENT OF ERRORS. 

The opinion of the District Court is found in the 
transcript of record, pages 16-20. The statement of 
facts found on pages 16 and 17 are not disputed by 
appellant. However, objection is raised to the follow T - 
ing statements contained in the court's opinion: 

1. "To resolve the jurisdictional issue, it is not 
necessary to decide whether a court martial conviction 
of the crime of manslaughter, where there has been a 
previous trial of the crime of assault to commit mur- 
der, amounts to double jeopardy. This is for the 
reason that the specific guaranties of the Fifth Amend- 
ment to the Constitution relating to criminal prosecu- 
tion may not be invoked in ' cases arising in the land 
or naval forces of the United States' ". It will be 
contended in appellant's argument and supported by 
authorities that the portion of the Fifth Amendment 
to the Constitution relating to "double jeopardy" may 
be invoked in cases arising in the naval forces of the 
United States. 

2. "The Naval Court's decision denying the plea 
of double jeopardy may have been erroneous. But, 



such errors of law by court martials are not of them- 
selves reviewable or correctable in the civil court." 

3. The language of the District Court is contra- 
dictory in stating (a) "they (errors of general court) 
may be reviewed here only if they are of such a 
nature to amount to a breach of the basic doctrine of 
fairness under the due process clause of the Consti- 
tution and thus oust the naval court of jurisdiction" 
and (b) "and to those in the military services or naval 
services of the United States, the military law is due 
process". This part of the opinion states that only 
under the due process laws of the Constitution may a 
Federal Court review errors of Naval Court and then 
it states that military law is due process to those in 
the services. 

4. The opinion states "No claim is made of any 
unfairness in the conduct of his trial.' ' Reference is 
made to the transcript of record, page 10, paragraph 
5, which is a specific objection to the fairness in the 
conduct of the second general court 'martial trial in 
that the Judge Advocate General of the Navy dictated 
the decision of the court in its ruling on the plea in 
bar prior to the presentation of evidence in the case. 

5. The opinion reiterates its statement that "But 
we may correct them here only if the errors amount to 
a denial of due process". This statement is found on 
page 19 of the transcript of record, on the same page 
on which it is stated by the court "The military law 
is due process". 



6. The matters presented to the District Court and 
the petition for writ of habeas corpus involves only a 
jurisdictional question and a question of law and it 
was error on the part of the court to indulge in the 
possible reasonings of the first General Court Martial 
in reaching a decision of "not guilty" on the assault 
with intent to commit murder charge. It was further 
error on the part of the court in failing to recognize 
that the conviction of the murder charge was an abso- 
lute nullity and deserving of no consideration what- 
soever; that further, the only proceedings which were 
valid under the first General Court Martial trial was 
the acquittal of appellant on the charge of assault 
with intent to commit murder. The Court 's reasoning 
in arriving at an acquittal is not a question for the 
Federal Court. 



ARGUMENT. 
Summary. 

It is urged by appellant that he was tried by a court 
of competent jurisdiction on the charge of assault 
with intent to commit murder and was duly acquitted 
of this charge and three specifications thereunder. 
There was no question of the validity of that acquittal 
even though in the same trial, the trial court found 
him guilty of the charge of murder, which is a charge 
over wdiich that court had no jurisdiction and there- 
fore the proceedings as to that charge of murder alone 
were void, and the sentence a nullity. This jurisdic- 
tional mistake on the part of the Government in no 
way affected the validity of appellant's acquittal of 



the charge of assault with intent to commit murder. 
It is urged by appellant that having been once ac- 
quitted of this charge, he could nol thereafter be 
prosecuted Tor the same charge or any degree thereof. 
"An acquittal or a conviction under an indict- 
ment for a crime consisting of different degrees 
is a bar to a prosecution for another degree, the 
finding of one degree being deemed to operate as 
an acquittal and bar to prosecution on the other 
degrees". 

Grafton v. U. S., 206 U. S. 333, 51 L. Ed. 1084, 
27 S, Ct. 749. 

Following the acquittal of appellant of the charge of 
assault with intent to commit murder and at the outset 
of a second trial charging him with manslaughter of 
the same victim under the same circumstances and 
state of facts, a plea in bar was duly entered but was 
denied and a second trial resulted in conviction of 
appellant which is the Government 's reason for hold- 
ing him in custody at present. In holding appellant 
in custody by virtue of the sentence of the second trial 
appellant contends that this is in violation of that 
part of the Fifth Amendment to the Constitution 
which states "nor shall any person be subject for the 
same offense to be twice put in jeopardy of life or 
limb". U.S.C.A. Const. 5. 

The double jeopardy clause of the Fifth Amendment applies to 
Naval Personnel. 

The principal objection to the opinion of the Dis- 
trict Court is the statement that the specific guar- 
anties <>f the Fifth Amendment to the Constitution 



8 



relating to criminal prosecutions may not be invoked 
in " cases arising in the land or naval forces" of the 
United States. Before citing cases which show that 
a naval officer is entitled to derive benefit from that 
part of the Fifth Amendment to the Constitution re- 
lating to double jeopardy, it is desired to point out 
wherein the cases cited in the court's opinion do not 
apply to the case at bar. Ex parti Quirin, 317 U.S. 
43 and Ex parti Milligan, 71 U.S. 2, 123, cited in the 
court's opinion are found on page 18 of the transcript 
of record. Both have to do with the exception which 
does not require a presentment or indictment of a 
Grand Jury. It is not questioned that one in the 
military service may be tried by the regular prescribed 
procedurt of the military without a presentment or 
indictment of a Grand Jury. Therefore the holdings 
in Ex parte Quirin and Ex parti Milligan have no 
bearing on that portion of the amendment which per- 
tains to double jeopardy. The other cases cited by the 
court in support of its contention that the Fifth 
Amendment relating to criminal prosecutions may not 
be invoked in cases arising in the land or naval forces ; 
namely, F. S. ex rel. Innes v. Crystal (2 Cir.), 131 
Fed. (2d) 576 and Ex parte Benton, 63 Fed. Supp. 
808; relate to facts foreign to the question at bar. 
The case of U. S. ex rel. Innes v. Crystal (supra) as 
well as the case of Ex parte Benton, involved ques- 
tions of whether or not the accused was properly rep- 
resented by counsel, and whether the lack of com- 
petent counsel, if proved, would be a denial of due 
process. Appellant is in agreement with the holdings 
in the above cases as cited by the District Court, but 



desires to point out thai in none of those cases was the 
clause of the Fifth Amendment which is relied upon 
by appellant, discussed. 

It is most necessary in this case to examine the 
Fifth Amendment to the Constitution and dwell on 
that clause which is applicable to the present facts. 
The facts in this case have to do with double jeopardy. 
The pertinent clause is "nor shall any person be sub- 
ject for the same offense to be twice put in jeopardy 
of life or limb". As further evidence to the fact that 
it was intended by the framers of the amendment that 
each clause should be construed separately, attention 
is called to that clause which immediately follows the 
one relied upon by appellant, "nor shall be compelled 
in any criminal case to be a witness against himself 
* * *". Clearly, if in a Naval General Court Martial 
an accused were forced to be a witness against him- 
self, this would be a violation of one part of the Fifth 
Amendment and relief should be granted by the Fed- 
eral Courts. It cannot be said that a person on ac- 
count of his military status may, in violation of the 
above-cited clause of the Constitution, be forced to 
testify against himself. It is conceded that the first 
part of the Fifth Amendment does make an exception 
to members of the military in stating "no person shall 
be held to answer for a capital or otherwise infamous 
crime unless on a presentment or indictment by a 
Grand 'Jury, except in cases arising in the land or 
naval forces or in the militia, when in actual service 
in time of war or public danger". This is a complete 
statement and the exception noted applies only to that 



10 



which is contained in that complete statement and 
does not apply to the separate guaranties which fol- 
low, among which is that guarantee against twice being 
prosecuted for the same offense. In this connection, 
appellant refers to the case of U. S. v. Haitt (3 Cir.), 
141 Fed. (2d) 664, which is also cited in the District 
Court's opinion, page 19, and appellant respectfully 
calls the court's attention to the following language 
used in this case : 

"We think that the basic guarantee of fairness 
afforded by the due process clause of the Fifth 
Amendment applies to a defendant in criminal 
proceedings in a Federal military court as well 
as in a Federal civil court. An individual does 
not cease to be a person within the protection of 
the Fifth Amendment to the Constitution because 
he has joined the nation's armed forces and has 
taken the oath to support that constitution with 
his life, if need be. The guarantee of the Fifth 
Amendment that 'no person shall * * * be de- 
prived of life, liberty or property without due 
process of law' makes no exceptions in the case 
of persons who are in the armed forces. The fact 
that the framers of the Amendment did specifically 
except such persons from the guarantee of the 
right to a presentmmt or indictment by a Grand 
Jury which is contained in the earlier part of the 
Amendment makes it even clean r that persons in 
the armed forces were intended to have the benefit 
of the due process clause." (Emphasis supplied.) 

If we may rely on the same cases as cited by the 
District Court, it becomes clear that only the first part 
of the Fifth Amendment, that having to do with pre- 



11 



sentmenl or indictment by a Grand Jury, affects mem- 
bers of the naval forces. IT, according to this case, 

members of the armed service arc entitled to due 
process of law, clearly they are also entitled to that 
guarantee againsl double jeopardy to which no ex- 
ception is mentioned in the amendment itself. Citing 
this case further as to the question of whether or not 
habeas corpus proceedings are the proper remedy for 
violation of the Filth Amendment, the court said, 
kk We conclude that it is open for a civil court in a 
habeas corpus proceeding- to consider whether the cir- 
cumstances of a court martial proceeding and the 
manner in which it was conducted ran afoul of the 
basic standard of fairness which is involved in the 
constitutional concept of the due process of law, and 
if it so finds to declare that the relator has been de- 
prived of his liberty in violation of the Fifth Amend- 
ment and to discharge him from custody/' The court 
in the Hiatt case indulged in the question of whether 
or not the accused was deprived of his constitutional 
rights because the trial court conferred with the judge 
advocate not in the presence of the accused, and fur- 
ther, that the trial court postponed the deliberation 
on a verdict. Appellant is in agreement with the case 
as cited by the District Court in its opinion and urges 
that if the court in the Hiatt case had found a viola- 
tion of the Fifth Amendment, the relator would have 
been discharged from custody by order of that Fed- 
eral Court. Similarly, it is urged here that if the 
District Court Found that appellant in fact had been 
acquitted of assault with intent to commit murder and 



12 



subsequently denied a plea in bar and was convicted 
on the second trial of manslaughter, which said charge 
includes assault, then that portion of the Constitution, 
4 'nor shall any person be subject for the same offense 
to be twice put in jeopardy of life or limb" had been 
violated and the District Court was in error in stating 
that this particular guaranty of the Constitution was 
not applicable to cases arising in the naval forces. 

In further support of applicant's argument that the 
District Court erred in its statement that the guar- 
anties of the Fifth Amendment do not apply to cases 
arising in the naval forces, appellant respectfully sub- 
mits the case of Sanford v. Bobbins, 115 Fed. (2d) 435 
(5 Cir.), 1940. This case is believed to answer the 
question of whether or not a Federal Court may re- 
view a question involving double jeopardy in a naval 
military court and the opinion states without equivo- 
cation that the navy, contrary to the army, recognizes 
that the members of its forces shall not be deprived 
of that portion of the Fifth Amendment relating to 
double jeopardy. In this case the accused was tried 
and sentenced to life imprisonment by a naval general 
court martial. The President of the United States 
gave the accused a new trial due to certain irregu- 
larities in the first trial. This administrative action 
was for the benefit of the accused and in no way under 
this particular circumstance could be considered as 
an acquittal, the court saying that in light of such 
consideration of the accused's rights it could be as- 
sumed that the accused would ask lor a new trial and 
accept one if granted, as he could be in no worse posi- 



13 



tion as the result of a new trial. The court said "we 
have no doubt that the provision of the Fifth Amend- 
ment 'nor shall any person be subject for the same 
offense to be twice put in jeopardy of life or Limb' is 
applicable to courts martial. The immediately pre- 
ceding exception of 'cases arising in the land or naval 
forces' from the requirement of an indictment abun- 
dantly shows that such cases were 1 in contemplation but 
not excepted from the other provisions." 

In the case of Ex parte Costello, 8 Fed. (2d) 38b, the 
accused was tried and convicted by a Naval General 
Court Martial, then requested a new trial of the Secre- 
tary of the Navy which was granted. At the second 
trial, tlic accused argued that the setting aside of the 
first proceedings and granting a new trial was tanta- 
mount to an acquittal and therefore he could not be 
tried again. The trial court erroneously sustained 
his plea in bar. which action was disapproved by the 
judge advocate general, and the accused again ordered 
to trial. The Federal Court in this case did not deny 
that the guaranties of the Fifth Amendment were 
available to relator, but quite the contrary, the court 
examined the facts in order to determine whether or 
not there had been double jeopardy. The court's 
examination of these facts recognized the constitu- 
tional rights of the accused contrary to the opinion 
of the District Court in the instant case. The court 
said "The single question for determination is the 
effect of the disapproval of the sentence and the order 
thereon by the Secretary of the Navy" The court 
held that the appearance of the accused in entering a 



14 



plea in bar did not place him in jeopardy. "This 
appearance was not a trial putting him in jeopardy 
so as to require his release from custody on writ of 
habeas corpus." From this language it may be in- 
ferred that if the second trial had progressed as far 
as an arraignment and the reviewing authorities dis- 
approved of the proceedings of its own volition, not 
by request of the accused, this would be jeopardy and 
would bar a subsequent trial. It may also be in- 
ferred that "his release from custody on writ of habeas 
corpus" would be appropriate. In recognizing the 
specific guaranty of the Fifth Amendment relating 
to double jeopardy, the court in the Cost ell o case said 
"The 102nd Article of War (Comp. St. 2308A) pro- 
vides that no person shall be tried a second time for 
the same offense. Section 649 of ' Naval Courts and 
Boards' (now section 408) issued by the Navy De- 
partment and approved by the President for the gov- 
ernment of persons attached to the naval service which 
seeks to carry out this provision of the Articles of War 
reads as follows 'The Fifth Amendment to the Con- 
stitution of the United States provides that no person 
shall "be subject for the same offense to be twice put 
in jeopardy of life or limb". This provision is the 
authority for the principle that no person shall be 
tried a second time for the same offense' ". 

The case of Ex parte Quirin (supra) which is cited 
by the District Court in its opinion considers the 
question of whether or not an enemy of the govern- 
ment may be tried by a military commission and not 
afforded the guaranty of a presentment or indictment 



15 



by a Grand Jury. It holds that such persons are not 
afforded this specific guaranty but the entire case 
makes no reference whatsoever to that provision of 
the Filth Amendment relating to double jeopardy. 
It refers specifically to the first provision as follows: 
"The exception of cases arising in the land or naval 
forces from the operation of the provision of the Fifth 
Amendment that no person shall be held to answer for 
a capital or otherwise infamous crime unless on a 
presentment or indictment of a Grand Jury applies to 
offenders against the law of war". It is contended 
that this case is in no way pertinent to the present 
facts. 

To further substantiate the contention that the guar- 
anty against double jeopardy as set forth in the Fifth 
Amendment applies to naval personnel, court martial 
order 141-1918 P 18 states "so far as concerns the 
administration of justice in the navy the legal bar to 
a second trial for the same offense is founded upon 
the Fifth Amendment of the Constitution of the 
United States, which provides that no person shall 'be 
subject for the same offense to be twice put in jeop- 
ardy of life or limb'. There is no law expressly 
applying the benefit of this constitutional provision 
to persons tried by naval courts martial, but the Fifth 
Amendment applies to them of its own force without 
requiring expression in an Act of Congress". This 
court martial order cites Grafton v. United States, 
20() U.S. 333. The court martial order further pro- 
vides "with relation to persons subject to trial by 
army courts martial it is provided by article 40 of the 



16 



Articles of War (39 Stat. 657) that 'no person shall 
be tried a second time for the same offense \ The 
article clearly defines the meaning of the constitutional 
provision, which, while its main purpose is to prevent 
a second punishment for the same offense, has been 
repeatedly construed to prohibit a second trial where 
the accused has been previously acquitted or con- 
victed of the same offense except with his consent 
or at his own request. Ex parte Lange, 18 Wall. 163 ; 
In re Nielsen, 131 U.S. 176, 188; Kepner v. U. S., 195 
U.S. 100; 1 Op. Atty Gen. 233." This court martial 
order clearly recognizes the distinction between double 
jeopardy arising in the military forces and double 
jeopardy arising in the naval forces. The members of 
the military service are protected by the Articles of 
War. The Fifth Amendment to the Constitution re- 
lates to members of the naval service. " Under the 
practice of both the army and navy it seems to be 
long settled that where the accused has once been 
convicted or acquitted he has been tried in the sense 
of the Articles of War and the Fifth Amendment to 
the Constitution". 

Habeas corpus is the proper remedy by which a 
member of the naval service may be released from 
custody when he has been tried and acquitted of a 
charge and is kept in custody following a second trial 
on the same issues. This was recognized in court 
martial order 8, 1929, pages 14 and 15. 

On pages 18 and 19 of the Transcript of Record, the 
District Court in its opinion states "the naval court's 
decision denying the plea of double jeopardy may have 



17 



been erroneous but such errors of law by courts 
martial me not of themselves reviewable or correctable 
in the civil courts. They may be reviewed here only 
if they are of such a nature as to amount to a breach 
of the basic doctrine of fairness under the due process 
clause of the Constitution and thus oust the naval 
court of jurisdiction/ 1 The District Court apparently 
recognizes that at least one guaranty under the Fifth 
Amendment to the Constitution is available to mem- 
bers of the U.S. Navy. The opinion does not refer to 
" cases arising in the land or naval forces " in con- 
cluding that if there is a showing of lack of due 
process by a breach of the basic doctrine of fairness 
then the Federal Court can apply the Fifth Amend- 
ment to the Constitution to cases in which due process 
of law is denied. In other words, the court concedes 
that the due process clause of the Constitution is not 
excepted from cases arising in land or naval forces 
as is the first clause of that amendment pertaining to 
indictment of a Grand Jury. Why then would not 
other parts of the Fifth Amendment apply to naval 
personnel unless excepted i 

The language of the opinion of the court, page 19, 
states that only under the due process clause of the 
Constitution could relief be sought in the civil court 
and that ''the military law is due process" which 
leaves us with not even a hypothetical case reviewable 
by the civil court. If the civil court can only attack 
the action of a naval court for violation of due 
process and "military law is due process" then mili- 
tary law stands alone and no civil court could interfere 



18 



with any of its actions despite any violations of other 
provisions of the Fifth Amendment. For example, 
the property of a sailor could be taken without due 
process of law or his life may be taken without a trial 
as "military law is due process" and would not, ac- 
cording to the opinion, be subject to any supervision 
of the Federal Courts. Likewise, a sailor who may 
be forced to testify against himself and convicted on 
such testimonv would have no recourse to the civil 
courts by w r ay of the great writ of habeas corpus. 

The case of Reaves v. Ainsworth, 219 U.S. 304 as 
cited on page 19 of the Transcript of Record in the 
District Court's opinion, had to do w r ith the question 
of the findings of a board of medical examiners, de- 
termining the rights of an army officer. In so far as 
the constitutional guaranty against double jeopardy 
is concerned, this case does not appear to be in point. 
It does not raise the question of whether a naval 
officer is entitled to that specific guaranty of the Con- 
stitution against double jeopardy. It is more of a 
discussion of the procedure of retiring army officers 
on medical discharges. 

The case of Ex parte Benton, 63 Fed. Supp. 808, 
was a case involving the qualifications of a defense 
counsel in a general court martial trial, which, as the 
opinion stated, was little more than a criticism of 
counsel. Nowhere in the case is there found any 
reference to the question presented by the facts at 
hand. The Benton case did not pertain to double 
jeopardy or the specific guaranty against double 
jeopardy as provided Tor in the Fifth Amendment to 



19 



the Constitution. This and the Eeeves case considered 

the question of fairness of the military whereas in 
the case at bar, reliance is solely upon the law, as we 
arc not permitted to indulge in the reasoning for the 
first acquittal but must confine our arguments to the 
fact that there was an acquittal and a subsequent trial 
on the same facts, which it is contended, constitutes 
double jeopardy. 

1 1 is believed to be error on the part of the District 
Court to indulge in speculation as to how the first 
trial court reached its decision in acquitting the ac- 
cused of the charge of assault to commit murder. It 
was further error on the part of the District Court to 
take into consideration a conviction of the murder 
charm 1 . The conviction of the murder charge was an 
absolute nullity, deserving of no consideration for the 
reason that the naval court in Hawaii did not have 
jurisdiction over this particular crime as the alleged 
murder was committed within the territorial jurisdic- 
tion of the United States, 34 U.S.C. 1200, Art. 6. The 
naval trial court in Hawaii did have jurisdiction of 
the .crime of assault with intent to commit murder. Its 
findings were final as the court acquitted the accused. 
This judicial act by a competent court cannot be 
ignored. The error on the part of the navy in errone- 
ously preferring the charge of murder cannot nullify 
an acquittal of the accused on a charge over which it 
had jurisdiction. In the case of Rosborough v. Rossell, 
CMO 9, 1945, page 399, the United States Circuit 
Courl of Appeals for the First Circuit on July 26, 
1945, rendered an opinion which is believed to set 



20 



forth one of the principles involved in the present 
case. In the ItosborougJi case, the accused was tried 
on one single charge, that of murder. Under circum- 
stances similar to appellant's case, it was held that the 
general court martial lacked jurisdiction over the 
charge and the court could not find the accused guilty 
of even a lesser included offense as there was no 
jurisdiction whatsoever to proceed to a trial on the 
single charge of murder. The court said, however, 
"Rosborough might have been brought to trial on a 
charge of murder and a specification thereunder and 
a separate charge of manslaughter and a specification 
thereunder. In such a case the court martial would 
have had no jurisdiction of the murder charge but 
that would not have rendered the proceedings wholly 
void since it would have had jurisdiction of the 
charge of manslaughter since a finding of guilty of 
manslaughter only and sentence therefor would have 
been valid." This is analogous to our case in that 
appellant was tried on two charges, (I) murder, over 
which the court had no jurisdiction, and therefore 
proceedings as to this charge were void, and (2), as- 
sault with intent to commit murder of the same victim, 
of which charge he was acquitted. This acquittal, it 
is urged, is a bar to any subsequent trial of this 
offense or any included or greater offenses. Were this 
not so, appellant could have been tried a second time, 
not only for manslaughter of Lieutenant Travis, but 
tried for assault or assault with a deadly weapon of 
the two other officers named in the two other specifi- 
cations under the assault with intent to commit 



21 



murder charge. These specifications are found on 
pages 4 and 5 of the Transcript of Record. It was 
not contended by the Navy Department that appellant 
should be tried a second time for assault against 
Lieutenant Robert M. Nason and Lieutenant Joseph 
A. Osborn, although the evidence adduced at the first 
trial was necessarily the same as adduced at the 
second trial. Obviously the Navy Department recog- 
nized appellant's acquittal of these two specifications 
under the assault charge but by insisting upon a sec- 
ond trial for manslaughter has failed to recognize the 
acquittal of the assault alleged in the first specifica- 
tion. 

The District Court's opinion beginning on page 19 
states "The entire record of petitioner's case negatives 
the assumption that he may have been acquitted of 
assault with intent to commit murder due to a lack of 
the required degree of proof to establish the commis- 
sion by him of any assault upon the deceased at all 
or of an intent to kill. Indulgence in this assumption 
would require complete disregard of the fact that the 
court martial believed and found him guilty of the 
greater crime of murder". It is contended that the 
Federal Court may look at the trial court's decision 
only and not speculate on how the court reached its 
decision. In this case there was an acquittal of as- 
sault with intent to commit murder. It is not dis- 
puted that the court was one of competent jurisdiction, 
had jurisdiction of the person and the charge. 'There- 
fore its derision — acquittal — cannot be questioned. It 
is not disputed that the same court had absolutely no 



22 



jurisdiction over the greater crime of murder. It is 
further not disputed that any finding on this charge 
is a nullity and it is beyond the scope of inquiry by 
any court to condone such an error in preferring this 
charge by then permitting the Navy to try the accused 
on a more appropriate charge despite the final act of 
acquittal in the previous proceedings. The Federal 
Court case of Grafton v. The United States (supra) 
in considering whether or not the double jeopardy 
clause of the Fifth Amendment to the Constitution 
applied to "cases arising in the land or naval forces", 
did not question Grafton's right to have the Federal 
Court determine the question of double jeopardy. In 
this case Grafton was acquitted by a Military Court 
Martial, then tried by the Philippine Civil Court for 
the same offense. The Federal Court held that Grafton 
had once been in jeopardy when tried by the Military 
Court Martial, was acquitted and could not be tried 
by the Philippine Court. The act of Grafton was an 
offense against one Government, the United States 
Government, and since both the military court and the 
Philippine court derived their authority from the 
United States Government there was but one offense 
and that against the same Government. Similarly, 
in the case at bar there were two trials both by mili- 
tary courts. There is no question of the alleged act 
being an offense against both the Navy and State 
Government. The Grafton case recognized the con- 
stitutional guaranty against double jeopardy to mem- 
bers of the Military. 



23 



UNFAIRNESS IN CONDUCT OF SECOND TRIAL. 

As a separate and distinct argument of appellant, 
reference must be made to page 19 of the Transcript 

of Record in which the opinion of the District Court 
states "No claim is made of any unfairness in the 
conduct of his trials". Attention is respectfully called 
to page 10 of the Transcript of Record, paragraph five 
of the petition for writ of habeas corpus. In said 
paragraph of the petition it was complained that the 
Judge Advocate General of the Navy issued an opinion 
determining for itself the question of former jeopardy 
and this opinion which ruled that to try appellant a 
second time would not be double jeopardy, was an un- 
fair way of dictating to the trial court its decision 
before evidence could be adduced. That such a written 
opinion was introduced into evidence at the second 
trial of the appellant has not been denied by the ap- 
pellee. It was obvious that the Navy Department in 
Washington had a very complex situation in appel- 
lant's record of his trial at Hawaii. There was a con- 
viction which was void. There was an acquittal which 
was valid. With this situation and particularly in 
light of the fact that at the time of the second trial, 
appellant had been imprisoned since August 7, 1944 
without a valid conviction, the Judge Advocate Gen- 
eral issued an opinion that it would be legal and 
proper to try appellant a second time for man- 
slaughter. This opinion emanated from Washington 
only after appellant had sought relief in the Federal 
Court and the Navy Department had to show cause 
why appellant was still incarcerated, having had no 



2-1 



valid trial other than that which resulted in an 
acquittal. 

The trial court at the second trial, in light of the 
written opinion from Washington, would certainly not 
take the initiative to consider the facts and render a 
decision contrary to their superior officer. This pro- 
cedure shocks the sense of the basic doctrine of fair- 
ness and even under the conclusion reached by the 
District Court, such procedure in military law amounts 
to a denial of due process. 



ACQUITTAL OF ASSAULT CHARGE BAR TO PROSECUTION 

FOR MANSLAUGHTER. 

As to the question of w T hether an acquittal of the 
charge of assault with intent to commit murder will 
operate as a bar to a subsequent trial of manslaughter, 
the authorities are clear that manslaughter includes an 
assault and if not guilty of the assault then the ac- 
cused cannot be guilty of a homicide as a result of 
said assault. The leading Supreme Court case of 
Grafton v. United States (supra) states "if not guilty 
of the lesser crime the accused could not for the same 
acts be guilty of the offense of higher grade. * * * 
The Government cannot legally for the same transac- 
tion put a person in jeopardy for the second time by 
simply calling the offense another name. * * * Does 
the result of the first prosecution negative the facts 
charged in the second.' II so, double jeopardy lies". 
In this case we have to look a1 the result of the first 
prosecution. That result simply is an acquittal of 



25 



assault with intent to commit murder. This does 
negative the Facts charged in the second trial for 
manslaughter. Again we look at the results of the 
1 rial for murder and find a nullity. 

Section 119, Naval Courts and Boards, clearly states 
that the crime of assault is a lesser included offense 
of manslaughter. 

Using the evidence test referred to in the Graviers 
case (Graviers r. United States, 220 U.S. 338), "The 
evidence required to support conviction upon one of 
them would have been sufficient to warrant a convic- 
tion upon the other". In considering evidence neces- 
sary to convict appellant of voluntary manslaughter 
and in proving the words of the specification under 
that charge of manslaughter, it becomes apparent that 
in proving such a charge it is necessary to at least 
prove that appellant assaulted deceased Travis with 
the 38 calibre pistol. The court's attention is respect- 
fully called to the words of the tw T o specifications as 
set forth in the petition. Further the trial court 
having found there was no assoult by appellant with 
a gun or anything else, then using this evidence test 
to determine double jeopardy, we cannot again try 
appellant under the manslaughter charge which will 
require a finding by the court that appellant did 
commit some of the acts of which he was previously 
acquitted. 

In the case of In re Nielsen, 131 U.S. 176, the court 

states that 

"Whereas in this case a person has been tried and 
convicted for a crime which has various incidents 



26 

included in it, he cannot be a second time tried 
for one of those incidents without being twice put 
in jeopardy for the same offense". 

Appellant claims that the k k incident' ' common to both 
charges for which he was tried is assault. 

Quoting from the case of Tritico v. U. S., 4 F. (2d) 
664, in which the court uses Mr. Bishop's test of 
double jeopardy, 

"The test of what is the same offense is stated to 
be 'whether if what is set out in the second in- 
dictment had been proved under the first there 
could have been a conviction; when there could, 
the second cannot be maintained ; when there could 
not, it can be' ". 

Appellant alleges that the evidence necessary to con- 
vict on manslaughter if brought out in the previous 
trial for an aggravated assault which caused this 
homicide would necessarily have been sufficient to con- 
vict the accused of assault and therefore applying 
Mr. Bishop's test to the facts, the second prosecution 
for manslaughter should not have been maintained. 

In court martial order 2, 1928, page 20, accused 
was tried for manslaughter and acquitted. It is most 
interesting to note the language used by the Judge 
Advocate General dealing with lesser included offenses 
of which the trial court should have found the ac- 
cused guilty, to- wit: "But even had the evidence 
supported the court's finding that the accused was not 
guilty of voluntary manslaughter, for example that 
death resulted from some intervening cause and not 



27 



directly arising as a result of the accused's act of 
striking the deceased, and the evidence is uncontro- 
verted that he was struck by the accused, the court 
still possessed ample authority which it did not exer- 
cise to find the specification proved in part, that is, of 
finding that fin accused willfully and without jasti- 
fidblt caust struck- cmother person in the navy, and 
thi accused guilty in a less degree than cha/rged, since 
mere words will not justify an assault or the act of 
striking another/' Of course the accused in the above 
case having been acquitted of manslaughter was not 
again tried for assault or striking as it failed to find 
him guilty of these elements of manslaughter in the 
first trial, this acquittal amounting to a bar to further 
prosecution for these acts. 

Citing Naval Courts and Boards, Sections 408-410: 
"When a person has been once convicted or 
acquitted by a court of a certain offense, he is not 
subject to trial subsequently for a minor offense 
included therein. Likewise when once tried for a 
minor offense an accused cannot later be tried for 
a major offense of which it is a part, because to 
do so would be to place him twice in jeopardy 
for the minor offense." 

A simple assault is a lesser included offense of an 
aggravated assault, 4i assault with intent to commit 
murder". An assault is a lesser included offense of 
manslaughter whether voluntary or involuntary. This 
ls sel forth in Section 119, Naval Courts and Hoards. 

Quoting from the Leading case of Grafton r. United 
States (supra) : 



28 



"It is not in all cases necessary that the two 
charges should be precisely the same in point of 
degree for it is sufficient if an acquittal of one 
will show that the defendant could not have been 
guilty of the other. Thus a general acquittal of 
murder is a discharge of an indictment of man- 
slaughter upon the same person because the latter 
charge was included in the former and if it had 
so appeared on the trial the defendant might have 
been convicted of the inferior offense an acquittal 
of manslaughter will preclude a further prosecu- 
tion for murder, for if he w 7 ere innocent of the 
modified crime he could not be guilty of the same 
fact with addition of malice and design. ' ' 

In the case of Doggert v. State, 93 S.W. 399, it was 
pointed out: 

"When a person has been convicted or acquitted 
the state cannot upon the same evidence again 
convict him for the same act even though the 
crime is designated by another name/ 7 

The court in State v. Hoot, 120 Iowa 238, said: 

"It must be conceded that a charge of assault 
with intent to commit murder includes an assault 
with intent to commit manslaughter, an assault 
with intent to do great bodily harm, and also a 
simple assault. 



17 



In 26 American Jurisprudence 279, it was said: 
"It is rather difficult to conceive of a prosecution 
for homicide resulting from an assault where the 
defendanl has been Pound innocent of committing 
the assault/' 



29 



CONCLUSION. 

From the foregoing, it is respectfully submitted 
that: (1) The District Court of the United States for 
the Northern District of California, Southern Divi- 
sion, erred in concluding that the civil court could not 
enforce appellant's constitutional right of protection 
afforded him by that provision of the Fifth Amend- 
ment to the Constitution, to-wit: "Nor shall any per- 
son be subject for the same offense to be twice put in 
jeopardy of life or limb". (2) That the facts of this 
case show a valid acquittal of appellant on a charge 
of assault with intent to commit murder and that this 
acquittal by a court of competent jurisdiction pre- 
cludes any second prosecution for the same offense or 
any offense of which the previous charge was a part. 
That the United States Navy erred in prosecuting 
appellant a second time under these circumstances and 
that therefore the sentence under which appellant is 
now being held in custody is void for lack of jurisdic- 
tion. 

Therefore, it is prayed that this Honorable Court 
reverse the opinion of the District Court and order 
the release of appellant from custody. 

Dated, San Francisco, 
October 2, 1947. 

Respectfully submitted, 

Edwin S. Wilson, 

Attorney for Appellant. 



No. 11,682 

IN THE 

United States Circuit Court of Appeals 

For the Ninth Circuit 



Matthew Wrublewski, 



Appellant, 



vs. 



Captain S. X. McInerney, Command- 
ing Officer of United States Naval 
Receiving Station, Yerba Buena 
Island, San Francisco, California, 
and Rear Admiral D. B. Beary, 
United States Navy, Commandant 
12th Naval District, San Francisco, 

California, 

Appellees. 



> 



BRIEF FOR APPELLEES. 



Frank J. Hennessy, 

United States Attorney, 

Joseph Karesh, 

Assistant United States Attorney, 
Post Office Building, San Fran< 

Attorneys for Appellees. 



Subject Index 



Page 
Jurisdictional statement 1 

Statement of the ease 2 

Question involved 4 

Is an alleged erroneous decision of a naval court-martial 
overruling a plea of former jeopardy, cognizable in habeas 
corpus in the civil courts? 4 

Contention of appellees 4 

Argument 5 

An alleged erroneous decision of a naval court-martial, over- 
ruling a plea of former jeopardy, is not cognizable in 
habeas corpus in the civil courts 5 

The actions of the navy court were not such as to constitute 
lack of due process under military law 

The question of double jeopardy can not be raised by habeas 
corpus 16 

Summary 18 

Conclusion 19 



Table of Authorities Cited 



Cases Pages 

Clawans v. Rives (CCA-DC), 104 P. (2d) 840 17 

Collins v. Loisel, 262 U. S. 426 14 

Commonwealth v. Peters, 12 Met. 387 14 

Crapo v. Johnston, 144 F. (2d) 863, 864, Cert. den. De- 
cember 4, 1944 17, 18 

Daggart v. State, 93 S. W. 399 15 

Deming v. M'Claughry, 113 Fed. 639 14 

Grafton v. United States, 206 U. S. 334 10 

Gravieres v. United States, 220 U. S. 338 11 

Houston v. United States, 5 F. (2d) 497 14 

In re Harron, 191 Cal. 457, 466 17 

Johnsen v. United States (CCA-9), 41 F. (2d) 44 14 

Kastel v. United States (CCA-4), 30 F. (2d) 687, 688 17 

McCarthy v. Zerbst, 85 Fed. (2d) 640 12 

Murphy v. Massachusetts, 117 U. S. 155 14 

Palko v. Connecticut, 302 U. S. 320 13 

Re Bonner, 151 U. S. 242 15 

State v. Hoot, 120 Iowa 238 15 

Stone v. United States, 167 U. S. 178 11 

United States v. Ball, 163 U. S. 662 14 

United States v. Ratagczak, 275 Fed. 558 14 

United States v. Tyler, 15 F. (2d) 207 14 

Wolkoff v. United States, 84 Fed. (2d) 17 9,14 

Statutes 

Title 18 U.S.C.A., Section 455 10 

Title 28 U.S.C.A., Sections 451, 452 and 453 1 

Title 28 U.S.C.A., Sections 463, 225 2 



No. 11,682 

IN THE 

United States Circuit Court of Appeals 

For the Ninth Circuit 



Matthew Wrublewski, 



Appellant, 



vs. 



Captain S. X. McInerney, Command- 
ing Officer of United States Naval 
Receiving Station, Yerba Buena 
Island, San Francisco, California, 
and Rear Admiral D. B. Beary, 
United States Navy, Commandant 
12th Naval District, San Francisco, 

California, 

Appellees. - 



BRIEF FOR APPELLEES. 



jurisdictional statement. 

This is an appeal from an order of the United 
States District Court for the Northern District of 
California, hereinafter called the " Court below", dis- 
missing petition for writ of habeas corpus. (Tr. 16- 
21.) The Court below had jurisdiction of the habeas 
corpus proceedings under Title 28 U.S.C.A., Sections 



451, 452 and 453. Jurisdiction to review District 
Court's order dismissing the petition is conferred on 
this Court by Title 28 U.S.C.A., Sections 463 and 225. 



STATEMENT OF THE CASE. 

The facts of this case -aw. as set forth by the Court 
below in its order and opinion dismissing' petition for 
writ of habeas corpus, which reads in part as follows: 
"Petitioner, an officer of the United States 
Navy, seeks by his petition for the writ of habeas 
corpus to be released from the custody of naval 
authorities who hold him at the United States 
Receiving Station, Yerba Buena Island, in this 
district, after his conviction on July 30, 1946, by 
a court martial of the crime of voluntary man- 
slaughter and subsequent sentence to five years 
imprisonment. The court issued an order direct- 
ing the commanding officers of the Receiving Sta- 
tion to show cause why the writ should not issue. 
Respondents then moved to dismiss the petition. 
After argument and the filing of briefs, the mo- 
tion has been submitted for decision. 

It appears from the petition that petitioner, on 
December 11, 1944, was tried before a Naval Gen- 
eral Court Martial at Pearl Harbor, Hawaii, for 
two offenses, to-wit : The crime of murder alleged 
to have been committed on or about August 7, 
1944, at the U. S. Naval Air Station, Oahu, 
Hawaii, and the crime of assault with intent to 
commit murder alleged to have been committed 
at the same time and place upon the same victim. 
The Naval Court adjudged petitioner guilty of 



murder and not guilty of the charge of assault 
with intent to commit murder. 

Upon review of the judgment, the Judge Advo- 
cate General, on Nov. 9, 1945, declared the judg- 
ment and sentence for the crime of murder il- 
legal, in that the same was committed 'within the 
territorial jurisdiction of the United States' and 
thus beyond the jurisdiction of that court mar- 
tial.* Petitioner was not, however, released from 
custody. On July 30, 1946, petitioner was brought 
to trial before another Naval General Court Mar- 
tial upon two charges, to-wit, voluntary man- 
slaughter and involuntary manslaughter. Both 
charges specified the same homicide for which 
petitioner was tried in the 1944 court martial. 
Conviction of the charge of voluntary man- 
slaughter and sentence to five years imprisonment 
followed. 

At his trial on the manslaughter charges, peti- 
tioner pleaded 'former jeopardy', in that he had 
previously (in 1944) been acquitted of the crime 
of assault with intent to commit murder upon the 
same victim. In support of this plea, petitioner 
alleged that the crime of assault with intent to 
commit murder was a lesser included offense of 
the crime of manslaughter and that acquittal of 
the former barred subsequent prosecution for the 
greater offense. The court martial overruled the 
plea and the judgment was later confirmed by the 
Judge Advocate General. 



•Naval Courts Martial have jurisdiction of the crime of 
murder only when committed outside the territorial jurisdiction 
of the U. S. A. 34 USC s 1200 Art. 6. 



Because of the alleged 'former jeopardy' 
(Const. Amdt. V), petitioner claims the Navy 
court, in the 194ti trial, was without jurisdiction 
and hence the writ should issue." 

The Court below based its order denying appel- 
lant's application for writ of habeas corpus on the 
sole ground that the appellant, being a member of the 
Naval service of the United States, was not entitled 
to the protection of the specific guarantees of the 
Fifth Amendment to the Constitution, which amend- 
ment contains the prohibition against placing a person 
twice in jeopardy. From the order dismissing peti- 
tion for writ of habeas corpus, appellant now appeals 
to this Honorable Court. (Tr. 21.) 



QUESTION INVOLVED. 

Is an alleged erroneous decision of a Naval Court- 
martial overriding a plea of former jeopardy, cog- 
nizable in habeas corpus in the civil courts/ 



CONTENTION OF APPELLEES. 
The answer to the above stated question is: NO. 



ARGUMENT. 

AN ALLEGED ERRONEOUS DECISION OF A NAVAL COURT- 
MARTIAL, OVERRULING A PLEA OF FORMER JEOPARDY 
IS NOT COGNIZABLE IN HABEAS CORPUS IN THE CIVIL 
COURTS. 

In denying appellant's application for habeas 
corpus the Court below said as follows: 

"Unless it appears that the Navy court lacked 
jurisdiction, this court may not review its judg- 
ment. IT. S. v. Grimley, 137 U.S. 147; Swaim v. 
U. S., 165 U.S. 553; Mullan v. U. S., 212 U.S. 
516; Ex parte Mason, 105 U.S. 696; Ex parte 
Reed, 100 U.S. 13; Carter v. McClaughry, 183 
U.S. 365. To resolve the jurisdictional issue, it 
is not necessary to decide whether a court martial 
conviction of the crime of manslaughter, where 
there lias been a previous trial of the crime of 
assault with intent to commit murder, amounts to 
double jeopardy. This is for the reason that the 
specific guarantees of the 5th amendment to the 
Constitution relating to criminal prosecutions 
may not be invoked in ' cases arising in the land 
or naval forces' of the United States. Ex parte 
Quirin, 317 U.S. 43; Ex parte Milligan, 71 U.S. 
2, 123; U. S. ex rel. Innes v. Crystal (2 Cir.), 131 
Fed. (2d) 576; Ex parte Benton, 63 Fed. Supp. 
808. The Naval court 's decision denying the plea 
of double jeopardy may have been erroneous. But 
such errors of law by courts martial are not of 
themselves reviewable or correctible in the civil 
courts/' (Tr. 18.) 

The Court below then went on to say that if the de- 
cision of the court-martial violated the " ' basic doc- 
trine of fairness' under the due process clause of the 



Constitution ", such action on its part would divest it 
of any jurisdiction, and accordingly any conviction 
resulting from such a decision would be void. (Tr. 19.) 

The Court below then asked itself the question as 
to whether or not the treatment given the appellant 
by the Navy court was so " unfair" as to constitute a 
lack of due process under military law. The Court 
below answered the question adversely to appellant in 
the following language: 

"Petitioner was represented by counsel during 
both courts martial. No claim is made of any 
unfairness in the conduct of his trials. It is not 
claimed that he was denied the right to produce 
witnesses or to cross examine witnesses. Nor is 
any conduct of the court itself complained of. 
The contentions made here were urged, both at 
his second court martial and upon review by the 
Judge Advocate General. They were determined 
adversely to him. Under military law, the deci- 
sions may have been wrong. But we may correct 
them here, only if the errors amount to a denial 
of due process. 

It is a reasonable inference, as it would be in 
the civil courts, that the charge of assault with 
intent to commit murder was added to the charge 
of murder at the first court martial in order to 
provide for the exigencies of proof. Obviously 
acquittal of the assault charge was in the nature 
of a dismissal of that charge, because of the find- 
ing of guilt of murder. The entire record of 
petitioner's case negatives the assumption that 
he may have been acquitted of assault with intent 
to commit murder due to a lack of the required 
degree of proof to establish the commission by 



him of any assault upon the deceased at all, or of 
an intent to kill. Indulgence in this assumption 
would require complete disregard of the fact that 
the court martial believed and found him guilty 
of the greater crime of murder. 

Nothing in the record presented by the petition 
indicates a violation of the basic doctrine of fair- 
ness. It is true that much fumbling and delay 
by the Naval authorities is disclosed. At least, 
from the civil viewpoint, it may be so character- 
ized. But I may not issue the writ for such rea- 
sons. In fact, nothing about this case bestirs any 
judicial urge to invoke the great writ of habeas 
corpus. Moreover, it may not be amiss to point 
out that the plight of petitioner, under all the 
circumstances, is not too unfortunate. Indeed he 
may have been more severely dealt with in the 
first instance had not the Naval authorities made 
the jurisdictional mistake of charging him with 
murder. 

My conclusion is that the showing made fails 
to demonstrate a breach of the broad and basic 
doctrine of fairness under the due process clause." 
(Tr. 19-20.) 

The appellees are in complete accord with the ruling 
of the Court below, that the specific guarantees of the 
Fifth Amendment are not available to the appellant 
because he is a member of the armed forces and urges 
that the Court below be upheld in its decision. The 
appellees of course adopt the authorities cited by the 
Court below in reaching the conclusion which it did. 



8 



THE ACTIONS OF THE NAVY COURT WERE NOT SUCH AS TO 
CONSTITUTE LACK OF DUE PROCESS UNDER MILITARY 
LAW. 

As to the question of whether or not the proceedings 
before the Naval Court were so unfair as to consti- 
tute a lack of due process under military law, the 
appellees herein, in support of the Court below, will 
now amplify this phase of the case. 

As indicated, appellant contends that the second 
court martial lacked jurisdiction over the crime of 
manslaughter because of a previous acquittal of a 
lesser included offense by what the appellant terms a 
" fully constituted naval general court martial". It 
is significant that appellant was tried for man- 
slaughter at the second trial only because the Navy 
lacked jurisdiction in the first instance of the charge 
of murder. At the first trial the main charge was 
murder and the charge of assault with intent to com- 
mit murder was preferred only to provide for the 
contingencies of proof. The facts in the case war- 
ranted a finding of guilty on a charge of murder and 
it was then necessary to make a disposition of the 
minor charge of assault with intent to commit murder. 
The acquittal on minor charge went merely to the 
exigencies of proof since there could be no assault 
with intent to commit murder where the intent had 
been consummated. When the first trial, proceed- 
ings, findings and sentence w T ere set aside for lack of 
jurisdiction over the crime of murder the effect was 
to nullify the whole process From its inception. In 
answer to the contention by the appellant that there 



was an acquittal of a lesser included offense in the 
first trial by a fully constituted naval general court 
martial which barred the trial and conviction for the 
ciinie of manslaughter at the second trial, appellees 
assert that the first court, lacking jurisdiction, was a 
nullity and that appellant was not duly tried and 
acquitted of any offense at that time. No practical 
injustice was inflicted on the accused in this case since 
the so-called acquittal on the charge of assault with 
intent to commit murder in the first trial would not 
have resulted if there had been any question at that 
time of the illegality of the charge of murder for 
which petitioner was tried. 

It is well established that second jeopardy does not 
attach where a Court has no jurisdiction of the offense 
charged. In the case of 

Wolkoff v. United States, 84 Fed. (2d) 17, 
the Court held appellant not in double jeopardy upon 
reindictment and trial resulting from faulty indict- 
ment in the first instance. The Court said the two 
essentials of legal jeopardy are that Courts have juris- 
diction and that indictment be valid. 

The appellant objects to his confinement following 
a determination that the first court-martial lacked 
jurisdiction over the crime of murder. When the 
first trial was set aside for lack of jurisdiction over 
the crime of murder, the Navy Department continued 
to have jurisdiction over petitioner and his confine- 
ment was in order until his case was disposed of by 
a Court of competent jurisdiction. 



10 



The case of 

Grafton v. United State*, 206 U. S. 334, 
is relied on by the appellant to support his plea of 
second jeopardy. That case can be distinguished 
from the facts in this case. In the Grafton case the 
accused was tried twice, first by court-martial, and 
later by the Philippine Civil Courts, both of which 
Courts owed their existence wholly to the United 
States. The acquittal, therefore, by the general court- 
martial precluded a second trial by the Philippine 
Civil Courts for the same offense. This, obviously, 
was double jeopardy since the first Court had juris- 
diction over the crime and the person. Jurisdiction 
over the crime charged was lacking in the present 
case in the first trial. 

The appellant contends also that the assault with 
intent to commit murder charged at the first trial is 
a lesser included offense of the charge of man- 
slaughter preferred at the second trial. As pointed 
out above it is the position of the appellees that the 
first trial was a nullity in its entirety and therefore 
of no effect. Assuming, but not admitting, that some 
effect must be given the acquittal at the first trial on 
the basis of a relation between assault with intent to 
commit murder and manslaughter, it is the further 
contention of the appellees that the two charges are 
separate and distinct as a matter of law. In this con- 
nection it should be noted that under the Federal 
statute dealing with assaults, a clear cut distinction is 
made between simple assault and assault with intent 
to commit murder, 18 USC 4,V>. The appellant fails 



11 



to note the above distinction, a distinction which is 
adopted in Naval Courts and Boards. This distinction 
is important because while simple assault of its nature 
is a lesser included offense under either murder or 
manslaughter, assault with intent to commit murder 
is not a lesser offense under manslaughter. It is well 
established that an acquittal in one indictment is not 
a defense for another action based on the same set 
of facts where the second action is a separate and 
distinct charge from the first indictment. 

Stone v. United States, 167 U.S. 178. 

In the case of 

Gmvieres v. United States, 220 U.S. 338, 
it was held that a conviction or acquittal upon one 
indictment is no bar to a subsequent conviction and 
sentence upon another unless the evidence required 
to support conviction upon one of them would have 
been sufficient to warrant a conviction upon the other. 
The test is not whether the defendant has already 
been tried for the same act, but whether he has been 
put in jeopardy for the same offense. The plea 
(double jeopardy) will be vicious if the offense as 
charged in the two indictments be perfectly distinct 
in point of law, however nearly they may be con- 
nected in point of fact. Gravieres was convicted 
under an ordinance prohibiting drunkenness, and rude 
and boisterous language, and the Court held that he 
was not put in double jeopardy by being subsequently 
tried under another ordinance for insulting a public 
office]' although the latter charge was based on the 
same conduct and language as to the former. In the 



12 



instant case, even assuming that the first trial was 
not a nullity, which appellees contend it was, for lack 
of jurisdiction, the charge of manslaughter preferred 
at the second trial, while growing out of the same 
facts, was a distinct and separate charge in point of 
law and cannot be barred by a plea of former 
jeopardy. 

In the case of 

McCarthy r. Zerbst, 85 Fed. (2d) 640, 
the general rule for establishing jeopardy was an- 
nounced substantially as follows: Where a person 
has been placed on trial on a valid indictment or in- 
formation before a Court of competent jurisdiction, 
has been arraigned and has pleaded, and the jury has 
been impaneled and sworn, he is in jeopardy, but 
until all these things have been done, jeopardy does 
not attach. The general rule presupposes all of the 
above ingredients including a trial before a Court 
of competent jurisdiction. By the appellant's own 
admission the naval court-martial in the first in- 
stance had no jurisdiction over the crime of murder. 
The plea of double jeopardy must therefore fail since 
the entire proceedings of the first court were set aside 
including the disposition of the minor charge of as- 
sault with intent to commit murder, which went only 
to the exigencies of proof. 

The second court-martial proceedings in this case 
being necessary because of jurisdictional error which 
nullified the first proceedings, the rule as announced 
in the case of 



13 



Pal ho r. Connecticut, 302 U.S. 320, 
is applicable. In that case it was held that where a 
new trial is ordered because of error and the accused 
is placed on trial a second time, it is not the sort of 
hardship to the accused that is forbidden by the 14th 
Amendment. In the Palko case the defendant was 
tried and found guilty of the crime of murder and 
sentenced to life imprisonment. The State of Con- 
necticut appealed under a statute permitting appeal 
in criminal cases. The Supreme Court of Errors 
found procedural error and ordered the defendant to 
be retried. He pleaded double jeopardy. The Court 
overruled the plea, found him guilty and sentenced him 
to death. The Supreme Court affirmed the proceed- 
ings, using the following language: 

"Is that kind of double jeopardy to which the 
statute has subjected him a hardship so acute and 
shocking that our policy will not endure it? Does 
it violate those fundamental principles of liberty 
and justice which lie at the base of all our civil 
and political institutions? The answer surely 
must be 'No'. * * * It (the statute) asks no more 
than this, that the case against him shall go on 
until there shall be a trial free from the corrosion 
of substantial legal error. 

"If the trial had been infected with error ad- 
verse to the accused, there might have been re- 
view at his instance, and as often as necessary to 
purge the vicious taint. 

"The conviction of appellant is not in deroga- 
tion of any privileges or immunities that belong 
to him as a citizen of the United States. 



>« 



14 



In the case of 

Murphy v. Massachusetts, 117 U.S. 155, 
the Court went even further. It held that a sentence 
and conviction after reversal of a former judgment on 
application of the accused, who had alleged that the 
judgment was imposed under a statute passed after 
the offense was committed and therefore unconstitu- 
tional, does not violate the constitutional provision 
against double jeopardy although the accused had 
served an invalid sentence before the judgment was 
reversed, including confinement. The case of 

Commonwealth v. Peters, 12 Met. 387, 
held that an acquittal before a Court having no juris- 
diction is, of course, like all the proceedings in the 
case, absolutely void and therefore no bar to subse- 
quent indictment and trial in a Court which has juris- 
diction of the offense. T<> the same effect see also 

United States v. Ball, 163 U. S. 662 ; 

Doming r. M'Claughry, 113 Fed. 639; 

United States r. Rdtagczak, 275 Fed. 558; 

Houston v. United States, 5 F. (2d) 497; 

United States r . Tyler, 15 F. (2d) 207; 

Johnsen v. United States (CCA-9), 41 F. (2d) 
44; 

Walk off v. United States, supra. 

The first court-martial of appellant being void for 
lack of jurisdiction over the crime of murder, all of 
the proceedings in that trial were void. In 

Collins v. Loisel, 262 U.S. 426, 
it was held that a discharge, because of irregular pro- 
ceedings under a writ of habeas corpus of one arrested 



15 



in extradition proceedings, was not res ad judicata 
beyond issues necessarily involved in the conclusion 
that the accused was illegally in custody at time of 
discharge, so as to prevent subsequent arrest for 
extradition For the same alleged offense. In the case 
of 

Re Bonner, 151 U. S. 242, 
it was held that one on whom an unlawful sentence 
has been imposed, upon being discharged on habeas 
corpus, may be sentenced in accordance with law on 
the subject. All of the foregoing cases unequivocally 
show that the plea of double jeopardy is not available 
as a sham to obscure justice. In denying the validity 
of the second trial the petitioner is attempting to 
traverse the mechanism of judicial procedure by set- 
ting up a bar which the law T never intended as a means 
to defeat justice. 

The case of 

Daggart v. State, 93 S.W. 299, 
cited by the appellant, does not apply because in that 
case there had been a trial by a Court of competent 
jurisdiction in the first instance, w-hich is not a fact 
in our case. The language in the case of 

State v. Hoot, 120 Iowa, 238, 
as cited by the appellant, has no appli cation here since 
it also presupposes action by a Court of competent 
jurisdiction in relation to a charge of assault with 
intent to commit murder. 

The contention by the appellant that the Judge 
Advocate Genera] denied the appellant the right of 



16 

review in rendering an opinion that the second court- 
martial did not constitute double jeopardy is wholly 
unfounded. The appellant has never been denied the 
right of review-. Accordingly this complaint is com- 
pletely without merit. 

To summarize this phase of the case, appellees be- 
lieve that it has been shown conclusively the treat- 
ment given the appellant by the Navy Court was not 
so unfair as to constitute lack of due process under 
military law. In fact appellees repeat what the Court 
below said: 

" Moreover it may not be amiss to point out 
that the plight of petitioner, under all the circum- 
stances, is not too unfortunate. Indeed he may 
have been more severely dealt with in the first 
instance had not the naval authorities made the 
Judicial mistake of charging him with murder. " 
(Tr. 20.) 



THE QUESTION OF DOUBLE JEOPARDY CAN NOT BE 
RAISED BY HABEAS CORPUS. 

The appellees have concerned themselves in this 
brief with the question as to whether or not an errone- 
ous decision by a naval court-martial overruling a 
plea of double jeopardy is cognizable in habeas corpus 
in the civil Courts. The appellees under authority 
of this Honorable Court can go further and assert 
that the defense of double jeopardy is never cog- 
nizable in habeas corpus, whether the party asserting 
it be complaining of the action of a civil or a military 
tribunal. 



17 

See 

Crapo r. Johnston, 144 F. (2d) 863, 864, cer- 
tiorari denied December 4, 1944, 
where this Honorable Court said: 

"There is no merit in the appellant's claim that 
the trial court is without jurisdiction or that he 
has suffered double jeopardy for the same offense, 
although the latter question can not be raised by 
habeas corpus." 

To the same effect see 

Kastel r. United States (CCA-4), 30 F. (2d) 
687, 688. 

For a contrary view, however, see 

Clawans v. Rives (CCA-DC), 104 F. (2d) 840. 

The Supreme Court of California, in the case of 
In re Harron, 191 Cal. 457, 466, 
has held that habeas corpus is an available remedy 
only where it is sought upon the claim that the 
prisoner has been placed in jeopardy for the identical 
offense, and not where it is merely contended that a 
prior conviction or acquittal on a particular charge 
or on particular facts is a bar to a new T charge. In 
our case at bar the appellant's grievance is not predi- 
cated on his being twice placed in jeopardy for an 
identical offense, but on an allegation of a second trial 
for an included offense. It should be called to the 
attention of this Court that the problem involved in 

Crapo v. Johnston, supra, 
was that of included offenses, although the Court 
drew no distinction between a grievance predicated on 



18 



a prisoner being twice placed in jeopardy for an iden- 
tical offense, rather than on an allegation of a second 
trial for an included offense. In any event, the appel- 
lant can find no comfort in the holding of this Court in 
Crapo v. Johnston, supra. 



SUMMARY. 

A member of the armed forces is not entitled to the 
protection of the Fifth Amendment, which contains 
a prohibition against "double jeopardy". A member 
of the armed forces is entitled to redress in the civil 
Courts only if the treatment accorded him by the 
court-martial was of such a nature as to constitute 
a denial of the "basic doctrine of fairness'' under 
the due process clause of the Constitution. 

The treatment accorded to appellant was extremely 
fair. 

Assault with intent to commit murder and man- 
slaughter are not included offenses, but even if they 
were, an erroneous decision by the court-martial would 
not constitute a denial of due process as might a re- 
fusal of the court-martial to entertain and pass upon 
the plea of former jeopardy, if interposed. 

The original court-martial lacking jurisdiction over 
the crime of murder committed within the territorial 
limits of the United States, the entire proceedings 
before it may properly be considered a nullity. 

Finally, the defense of former jeopardy is not cog- 
nizable in habeas rorpu; . -md more particularly where 



19 



the defense is interposed on the ground of a prior 
acquittal of an included offense, as contrasted with a 
prior acquittal of an identical offense. 



CONCLUSION. 

In view of the foregoing, it is respectfully urged 
that the order of the Court below is correct and 
should be affirmed. 

Dated, San Francisco, 
November 24, 1947. 

Respectfully submitted, 

Frank J. Hennessy, 

United States Attorney, 

Joseph Karesh, 

Assistant United States Attorney, 

Attorneys for Appellees. 



No. 11,682 

IN THE 

United States Circuit Court of Appeals 

For the Ninth Circuit 



Matthew Wrublewski, 



Appellant, 



vs. 



Captain S. X. McInerney, Command- 
ing Officer of United States Naval 
Receiving Station, Yerba Buena 
Island, San Francisco, California, 
and Rear Admiral D. B. Beary, 
United States Navy, Commandant 
12th Naval District, San Francisco, 
California, 

Appellees. 



> 



Upon Appeal from the District Court of the United States for the 
Northern District of California, Southern Division. 

CLOSING BRIEF FOR APPELLANT. 



Edwin S. Wilson, 

512 De Young Building San Franciscq 4. California, 

Attorney for Appellant. 

FIL 



•"> 



DEC 5 1947 



PAUL P, O'BRIEN, v 



Subject Index 

Page 
Statement of facts 2 

Points relied upon by appellant 3 

Argument 4 

Summary 13 



Table of Authorities Cited 



Cases Pages 

Crapo v. Johnston, 144 Fed. (2d) 863 12 

Daggert v. State, 93 S. W. 399 10 

Ex parte Biglow, 113 U. S. 328 12 

Ex parte Costello, 8 Fed. (2d) 386 5 

Grafton v. United States, 206 U. S. 333 5, 10 

Kastel v. U. S., 30 Fed. (2d) 687 12 

People v. Greer, 78 A.C.A. 349 (1947) 12 

Polko v. Connecticut, 302 U. S. 320 13 

Rosborough v. Rossell, 56 Fed. Snpp. 347 7 

Sanford v. Robbins, 115 Fed. (2d) 435, 438 (CCA. 5th, 

1940) 5 

State v. Hoot, 120 Iowa 238 10 

United States v. Haitt, 141 Fed. (2d) 664 5 

Miscellaneous 

26 Amer. Jurisprudence 276 10 

26 Amer. Jurisprudence 279 11 

Court Martial Order 141—1918, p. 17 5 

Court Martial 8, 1929, pp. 14 and 15 5 

Court Martial Order 9—1945, p. 399 7 

Naval Courts and Boards, Section 119 10 

Naval Courts and Boards, Section 408 5 

9 Ops. Attorney General 223, 230 (1858) 5 



No. 11,682 

IN THE 

United States Circuit Court of Appeals 

For the Ninth Circuit 



Matthew Wrublewski, 

Appellant, 
vs. 

Captain jfS. X. McInerney, Command- 
ing Officer of United States Naval 
Receiving Station, Yerba Buena 
Island, San Francisco, California, 
and Rear Admiral D. B. Beary, 
United States Navy, Commandant 
12th Naval District, San Francisco, 

California, 

Appellees. 



> 



Upon Appeal from the District Court of the United States for the 
Northern District of California, Southern Division. 

CLOSING BRIEF FOR APPELLANT. 



Appellant in this closing brief will confine the argu- 
ment to a brief summary of the facts in the case and 
a reply to appellees' argument. 



STATEMENT OF FACTS. 

The facts which are before this court are well sum- 
marized in the transcript of record and in both the 
opening brief of appellant and the brief for appellees. 
There appears to be no controversy in the record in- 
sofar as what has taken place in this case with re- 
spect to the various trials of appellant. 

Appellant has been tried by two Navy Courts Mar- I 
tial. The first trial was on December 11, 1944, and 
the charges were (1) murder and (2) assault with in- 
tent to commit murder. The facts in both charges 
alleged the same time and circumstances surrounding 
the death of one Lieutenant Roland S. Travis. This 
first trial resulted in a conviction of murder, and 
acquittal on the second charge of assault with intent 
to commit murder. The proceedings as to the murder 
charge w T ere void for lack of jurisdiction over this 
crime. It is contended by appellant that the court had 
jurisdiction over the crime of assault with intent to 
commit murder. 

The second trial, held on July 30, 1946, charged 
the accused with manslaughter (voluntary and invol- 
untary). A plea in bar of trial was duly entered al- 
leging that the previous acquittal at the first trial was 
a bar to any further prosecution for the homicide of 
Lieutenant Travis. This plea in bar was denied, and 
the court found the accused guilty of voluntary man- 
slaughter, dismissed him from the service and sen- 
tenced him to five years in prison, which sentence the 
accused is now serving and which sentence began to 
run on February 5, 1947, which was the time that 



appellant was notified by the Navy department of the 

final action taken in his case. When this sentence be- 
came final, a petition for a writ of habeas corpus was 
filed in the United States District Court, seeking the 
release from custody of appellant on the grounds that 
the second trial, conviction and sentence, and the re- 
straint of appellant, violated that portion of the Fifth 
Amendment of the Constitution which guarantees one 
against double jeopardy. The District Court dismissed 
the petition on the grounds that "the specific guaran- 
tees of the Fifth Amendment to the Constitution relat- 
ing to criminal prosecution may not be invoked in 
cases arising in the land or Naval forces of the 
United States.' 1 From this decision appellant appeals 
to this honorable court and prays that the decision of 
the District Court may be reversed and appellant 
released from imprisonment and restored to his lib- 
erty. 



POINTS RELIED UPON BY APPELLANT. 

The questions of law involved in this case appear 
to embrace the following principles: 

1. Does that portion of the Fifth Amendment to 
the Constitution relating to double jeopardy apply to 
members of the Naval service? Does one upon join- 
ing the Naval service forfeit his constitutional right 
to immunity from punishment twice for the same 
offense, or does he forfeit this right to protection of 
the Constitution upon joining the United States Navy 
for the purpose of protecting that same 1 Constitution? 



2. If the answer to the first question is resolved to 
be that members of the Naval service are protected by 
the double jeopardy clause of the Constitution, then 
is it double jeopardy to prosecute an accused for a 
homicide where that same accused has been acquitted 
by a court of competent jurisdiction of the assault 
from which the homicide resulted? This second ques- 
tion may be put another way. Where the first court, 
having all of the facts before it, finds the accused not 
guilty of assault with intent to commit murder, may 
the same authority ignore this finding and imprison 
the accused as the result of a prosecution for homicide 
in which the prosecution's evidence was necessarily 
the same as that produced in the first trial? 

3. The appellee raises the question as to whether or 
not habeas corpus is the proper method of effecting 
the release of one in confinement, allegedly confined 
on a void sentence. 



ARGUMENT. 

DOES THE FIFTH AMENDMENT PROTECT NAVAL PERSONNEL 

FROM DOUBLE JEOPARDY? 

Appellees, in quoting the opinion of the District 
Court, admit that that portion of the Fifth Amend- 
ment relating to due process does apply to Naval per- 
sonnel, and in the same opinion bases its conclusion in 
the statement that "the specific guarantees of the Fifth 
Amendment to the Constitution relating to criminal 
prosecution may not be invoked in cases arising in the 
land or Naval services of the United States." The 



cases cited by the court and relied upon by appellees 
in their brief, page 5, have been pointed out in appel- 
lant's opening brief to have no bearing on the instant 

case, as in not one of those cases was the question of 
double jeopardy discussed. The 1'aet that Naval per- 
sonnel are protected by the clause of the Fifth Amend- 
ment concerning double jeopardy was unquestioned by 
the Judge Advocate General of the Navy in Court 
Martial Order 141-1918, p. 17. This guarantee was 
likewise unquestioned by the Attorney General in his 
opinion, 9 Ops. Attorney General 223, 230 (1858). 

The case of San ford v. Bobbins, 115 Fed. (2d), 
435, 438 (CCA. 5th, 1940) held: 

"We have no doubt that the provisions of the Fifth 
Amendment 'nor shall any person — be twice put in 
jeopardy' — is applicable to courts martial. The imme- 
diate preceding exception of ' cases arising in the land 
or Naval forces' from the requirement of an indict- 
ment apparently shows that such cases were excepted 
from the other provisions.' ' 

See also 

Grafton, v. II. S., 206 U. S., 333; 
U. S. v. Haiti, 141 Fed. (2d), 664; 
Ex parte Costello, 8 Fed. (2d) 386; 
Section 408, Naval Courts and Boards Courts 
Martial 8, 1929, pages 14 and 15. 

Particular attention is again called to the quotation 
in the case of U. 8. r. Haitt, 141 Fed. (2d), 664, which 
is quoted on page 10 of appellant's opening brief. 



The above entitled authorities appear to resolve this 
question of whether or not the specific guarantees of 
the Fifth Amendment apply to cases arising in the land 
and Naval forces. Appellant failed to find one case 
cited by the appellees which hold to the contrary. As 
stated before, the cases relied upon by the District 
Court dealt with material foreign to double jeopardy. 

It is interesting to note the analysis of the present 
case In re Wrublewski, 71 Fed. Supp. 145 (N. D. Cal., 
1947), as made by the University of Pennsylvania 
Law Review. This Law Review discusses this case as 
follows : 

" Those properly under military jurisdiction 
are specifically excepted by the Fifth Amendment 
from the right to grand jury indictment. The 
clause providing this exception is relied upon in 
the instant case further to except military person- 
nel from the protection against double jeopardy. 
The court's authority for this extension is broad 
language in cases where the applicability of the 
double jeopardy clause was not in issue. Observ- 
ing that all of the Fifth Amendment relating to 
criminal prosecutions is inapplicable to courts 
martial, the court curiously then bases its refusal 
to review the findings on the due process clause 
of the same amendment, on the grounds that un- 
der the fairness doctrine the latter clause has not 
been violated." 

Further quoting the University of Pennsylvania 
Law Review (supra) : 

"The decision as to the double jeopardy clause 
is contrary to the plain language of the Fifth 
Amendment — A just result, however, will only be 



available upon the recognition that the holding in 

the instant case is based on inappropriate dicta." 

Appellant agrees with this Law Review article in its 
criticism of the erroneous conclusions reached by the 
District Court in stating that a member of the Naval 
forces can be subjected to double jeopardy with im- 
punity and there can be no relief under the Constitu- 
tion. 



DOES AN" ACQUITTAL OF ASSAULT WITH INTENT TO COMMIT 
MURDER PRECLUDE FURTHER PROSECUTION FOR A HOMI- 
CIDE RESULTING FROM THIS SAME ASSAULT ON THE 
SAME PERSON? 

Appellee cites many cases in his brief which are 
predicated on the fact that where the proceedings of a 
trial are void for lack of jurisdiction no jeopardy 
emerges. Appellant agreed w T ith this statement of the 
law but contends here that those cases cited by appel- 
lees are not in point for the reason that in appellant's 
first trial the proceedings as to the charges of assault 
with intent to commit murder were valid: the military 
court clearly has jurisdiction over a charge of this 
kind. The fact that the court lacked jurisdiction over 
the offense of murder did not invalidate the entire 
proceedings. This statement is substantiated by Ros- 
borough v. Rossell, 56 Fed. Supp., 347, Court Martial 
Order 9-1945, p. 399. In this case the accused was 
tried on one charge, that of murder; the proceedings 
were set aside for want of jurisdiction, and later ac- 
cused was tried for manslaughter. No double jeopardy 
resulted here as the first court had absolutely no juris- 



s 



diction to try the accused for murder and there was 
no other charge before the court. The court said: 

"Rosborough might have been brought to trial 
on a charge of murder and the specification there- 
under and a separate charge of manslaughter and 
a specification thereunder. In such a case, the 
court martial would have no jurisdiction of the 
murder charge. That would not have rendered 
the proceedings wholly void since it would have 
had jurisdiction of the charge of manslaughter, 
since a finding of guilty of manslaughter only and 
a sentence therefor would have been valid. " 

Similarly, in the instant case, there were two 
charges, murder, over which the court had no jurisdic- 
tion, and assault with intent to commit murder, over 
which the court did have jurisdiction. The proceed- 
ings under the second charge were valid. This consti- 
tuted being put in jeopardy once for assault with in- 
tent to commit murder and all included offenses and 
all greater offenses of which this offense may be a 
part. Therefore, following the herein mentioned ac- 
quittal, the Naval General Court Martial, on July 30, 
1946, had no authority to try appellant. 

The acquittal of appellant by the first court cannot 
be attacked by any civil court. This is for the reason 
that where a court has jurisdiction and does not ex- 
ceed its jurisdiction the civil courts may not attack 
the judgment of the military court regardless of how 
erroneous its decision might have been. This principle 
has been relied upon by both appellant and appellee 
and clearly is not disputed. Therefore, it was error 
on the part of the District Court to indulge in an 



attempt to excuse the Naval court's action in acquit- 
ting appellant of the assault charge. That acquittal 
stands and cannot be attacked. It may have been erro- 
neous, but the error committed by the Naval authori- 
ties in preferring a charge of murder when it had no 
jurisdiction of this charge camiot be the basis of ig- 
noring a valid legal acquittal. There is just no provi- 
sion whereby an acquittal by a court of competent 
jurisdiction may be set aside. We are not permitted 
to speculate on how the trial court arrived at an 
acquittal. If is contended by appellee that the charge 
of assault with intent to commit murder was pre- 
ferred to provide for the exigencies of proof. This 
might have been, but legally the proceedings as to the 
murder charge and that alone were void, and legally 
the acquittal of the second charge was valid. There 
we have the result of the first trial, and the result is 
the only phase of the trial which concerns us, which 
leads us to the conclusion, once establishing that there 
was a valid acquittal of assault, can the Navy Depart- 
ment put appellant in jeopardy a second time on the 
same facts for the same offense, whether that offense 
be identical or whether there is a greater offense of 
w T hich the first charge was a part? 

Appellee cites no authority to indicate that a trial 
by Court Martial is void as to its entire proceedings if 
the court should lack jurisdiction over one of many 
charges before it. In the instant case let us assume 
for the sake of discussion that the assault charge was 
preferred to provide for the exigencies of proof <>r 
any other exigencies. In this case the first court might 



10 



have convicted the accused of both charges, referring 
it to the reviewing authority to set aside any lesser 
offense. Had they done this, then when someone in 
the Navy department finally realized that Courts Mar- 
tial have no jurisdiction of murder allegedly commit- 
ted within the territorial jurisdiction of the United 
States, the accused would have stood convicted of the 
second charge and not escaped punishment if the facts 
warranted punishment. The first court in acquitting 
the accused of assault with intent to commit murder 
assumed that it had a valid conviction of the murder 
charge. When this was proved to be a nullity, by proc- 
ess of simple elimination, there was left standing one 
valid act of that court, namely an acquittal. The sec- 
ond court had no jurisdiction over the second charge 
as the Constitution bounds and limits all jurisdiction, 
and whenever there is a violation of an express provi- 
sion of the Constitution, this violation ousts the court 
of jurisdiction. 

As to the question of whether or not an acquittal of 
an assault with intent to commit murder may bar a 
prosecution involving the same facts on a charge of 
manslaughter, it may be readily recognized that ac- 
cording to Section 119 of Naval Courts and Boards 
"an assault is a lesser included offense of manslaugh- 
ter whether voluntary or involuntary. " 

The cases of Grafton v. TJ. S., 206 IT. S., 333; Dag- 
gert v. State, 93 S. W., 399 ; State v. Hoot, 120 Iowa, 
238, and in 26 Amer. Jurisprudence 276, are all suf- 
ficient authority for the proposition that in double 
jeopardy the offenses do not have to be identical, but 



11 



it is sufficient if the tacts are the same and one charge 
includes the other, or one charge is a part of a greater 
charge. 

Agreeing with 26 Amer. Jurisprudence, 279, 

"It is rather difficult to conceive of a prosecu- 
tion for homicide resulting from an assault where 
the defendant has been found innocent of com- 
mitting the assault. 



>> 



The crime of assault is certainly included in a crime 
of manslaughter. An assault is a lesser offense of the 
aggravated charge of assault with intent to commit 
murder. To permit the prosecution for an alleged as- 
sault with intent to commit murder, then a second 
prosecution for manslaughter clearly places the ac- 
cused twice in jeopardy for the crime of assault, and 
this is not permitted by the Constitution. Were this 
not so, accused could have been acquitted of assault, 
then tried for manslaughter and acquitted again, then 
brought to trial a third time for scandalous conduct, 
all three trials having presented before it the same 
facts. There would be no end to prosecutions in the 
Navy if we say that Naval personnel are not protected 
by the Constitution against prosecution for included 
offenses. 

From appellees' point of view it may be awkward 
to admit the mistake committed by the first court, if it 
did make a mistake, in acquitting the accused, but 
again, since that court had jurisdiction, its findings 
are final, and this acquittal must be recognized by all 
courts. 



14 

lant's imprisonment, and the decision of the District 
Court should be reversed and appellant released from 
confinement and restored to duty as an officer of the 
United States Navy. 

Dated, San Francisco, California, 
December 3, 1947. 

Respectfully submitted, 

Edwin S. Wilson, 
Attorney for Appellant. 



No. 11686 

(Hmteb States 

Circuit Court of appeals 

jf or tfje Hintij Circuit. 



ESTATE OF HOMER LAUGHLIN, Deceased, 
BEACH D. LYON, Administrator with the 
will annexed, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 



p ?l transcript of tfje Eecorb 



PAUL P. O'BRIEN, -. 

Upon Petitions to Review a Decision of the Tax Court 
of the United States 



Rotary Colorprint, 870 Brannan Street, Son Froncisco 7-31-47 — 60 



No. 11686 

(Bnitcb States 

Circuit Court of Appeals 

Jfor tfje J^tntf) Circuit. 



ESTATE OP HOMER LAUGHLIN, Deceased, 
BEACH D. LYON, Administrator with the 
will annexed, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 



GEranacript of tfje Jkcorb 



Upon Petitions to Review a Decision of the Tax Court 
of the United States 



Rotary Colorprint, 870 Bronnan Street, San Francisco 7-31-47 — 60 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record 
are printed literally in italic; and, likewise, cancelled matter appear- 
ing in the original certified record is printed and cancelled herein 
accordingly. When possible, an omission from the text is indicated by 
printing in italic the two words between which the omission seems to 
occur.] 

PAGE 

Answer 21 

Appearances 1 

Certificate of Clerk 129 

Decision 119 

Designation of Portions of the Record, Pro- 
ceedings and Evidence, to be Contained in 
the Record on Review 127 

Docket Entries 2 

Notice of Piling Petition for Review 124 

Opinion 90 

Petition 4 

Exhibit A — Letter to Mr. Lyon dated June 

6, 1944 (three enclosures) ... 12 

Exhibit B— Release 17 

Exhibit C — Interlocutory, Final Decree . . 19 

Petition for Review and Assignments of 
Error 120 

Proceedings 24 

Respondent's Computation for Entry of Deci- 
sion 116 



ft INDEX 

Recomputation Statement 117 

Statement of Points on Which Petitioner In- 
tends to Rely 125 

Stipulation of Pacts 30 

Exhibit C — Complaint for Declaratory Re- 
lief 39 

Exhibit D— Answer of Defendant Beach 
D. Lyon, and Beach D. Lyon 
as Administrator with the 
Will Annexed of the Estate 
of Homer Laughlin, Deceased 46 

Exhibit E— Judgment 6/28/33 49 

Exhibit E-l— Judgment 7/7/33 51 

Exhibit P — Agreement 53 

Exhibit G — Interlocutory Judgment of 

Divorce 57 

Exhibit H— Letter to Beach C. Lvon 

10/25/39 69 

Exhibit I— Fiduciary Income Tax Return 73 

Supplemental Stipulation of Facts 85 

Excerpts from Fifth Account Current and 
Report of Administrator with the Will 
Annexed Covering the Period Sept. 1, 
1941, to June 30, 1943. Filed Sept. 10, 
!943 86 

Exhibit J— Order Settling Fifth Account 
Current and Report of Admin- 
istrator with Will Annexed . . 88 



APPEARANCES 

For Taxpayer: 

JOSEPH D. BRADY 
WALTER L. NOSSAMAN 
JOHN O. PALSTINE 
STANLEY C. ANDERSON 

For Commissioner: 

E. A. TONJES 
R. TRANSUE 



2 Estate of Homer Laughlin, vs. 

Docket No. 5891 

ESTATE OF HOMER LAUGHLIN, Deceased, 
BEACH D. LYON, Administrator with Will 
Annexed, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

DOCKET ENTRIES 
1944 

Aug. 25 — Petition received and filed. Taxpayer 
notified. Fee paid. 
26 — Copy of petition served on General Coun- 
sel. 
25 — Request for Circuit hearing in Los An- 
geles filed by taxpayer. 8/28/44 Granted. 
Sept. 23 — Answer filed by General Counsel. 

29 — Copy of answer served on taxpayer, Los 
Angeles, Calif, calendar. 
1946 
Apr. 16 — Hearing set June 10, 1946, Los Angeles. 
June 10 — Hearing had before Judge Black on 
merits. Stipulation of facts and ex- 
hibits attached thereto filed at hearing. 
Petitioner's brief due 7/25/46; re- 
spondent's brief due 8/25/46; petition- 
er's reply due 9/15/46. 
July 5 — Brief filed by taxpayer. 7/8/46 copy 
served. 



Com. of Internal Revenue 3 

1946 
July 8 — Transcript of hearing 6/10/46 filed. 

Aug. 26 — Reply brief filed by General Counsel. 
Served 8/27/46. 

Sept. 13 — Reply brief filed by taxpayer. 9/16/46 
copy served. 
1947 

Jan. 16 — Opinion rendered, Judge Black. Deci- 
sion will be entered under Rule 50. 
Copy served. 

Feb. 17 — Respondent's computation for entry of 
decision filed. 

18 — Hearing set March 26, 1947 on Rule 50 r 
Washington, D. C. 

Mar. 26 — Hearing had before Judge Turner on set- 
tlement. Ordered referred to Judge 
Black. 

26 — Decision entered, Judge Black, Div. 15. 
June 20 — Petition for review by U. S. Circuit Court 
of Appeals for the Ninth Circuit with 
assignments of error filed by taxpayer. 

20 — Proof of service of petition for review 
filed by taxpayer. 

20 — Statement of points on which petitioner 
on review intends to rely with proof of 
service filed by taxpayer. 

20 — Designation of contents of record with 
proof of service thereon filed by tax- 
payer. [1*] 



* Page numbering appearing at top of page of original certified 
Transcript. 



4 Estate of Homer Laughlin, vs. 

The Tax Court of the United States 
Docket No. 5891 

ESTATE OF HOMER LAUGHLIN, Deceased, 
BEACH D. LYON, Administrator with the 
Will Annexed, 

Petitioner, 
vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

PETITION 

The above named petitioner hereby petitions for 
a redetermination of the deficiency determined by 
the Commissioner of Internal Revenue and set 
forth in his notice of deficiency (LA:IT:90D;PB) 
dated June 6, 1944, and as a basis on this proceed- 
ing alleges: 

1. Petitioner is a probate estate in process of 
administration under the jurisdiction of the Super- 
ior Court of the State of California, in and for the 
County of Los Angeles, Probate Cause No. 132875 
therein. The return of said estate for the taxable 
period here involved was filed with the Collector 
for the Sixth District of California on or before 
March 15, 1943. 

2. The notice of deficiency, copy of which, [2] 
with accompanying statement, is attached hereto 
as Exhibit A, was mailed to the petitioner on June 
6, 1944. 



Com. of Internal Revemu 5 

The taxes in controversy arc income taxes for 
the calendar year 1942 in the sum $7,977.09. 

4. In the determination of the deficien -y, re- 
spondent committed the following errors: 

a. Respondent erred in determining and holding 
that the taxpayer was not entitled to a d< ductioii of 
the sum of $1,200 paid to Ella West during- the 
calendar year 1942. 

b. Respondent erred in determining and hold- 
ing that the taxpayer was not entitled to a deduc- 
tion of $9,600 paid to Ada. Edwards Laughlin 
during the calendar year 1942. 

5. The facts upon which petitioner relies as the 
basis for this proceeding in so far as the sum of 
$1,200 paid to Ella West is concerned are as follows: 

a. Homer Laughlin, Sr., father of Homer 
Laughlin, Jr., died on or about January 10, 1913, 
leaving a [3] last will and testament dated August 
30, 1909, duly admitted to probate on January 29, 
1913, in the Superior Court of the State of Cali- 
fornia in and for the County of Los Angeles, No. 
22,692, which will contained among other provisions 
the following: 

" Second: I give, devise and bequeath unto 
my nieces, Ella West and Nancy Mcintosh, 
each the sum of One hundred dollars ($100) 
per month, payable quarterly to each of them 
during their natural life." 

b. On August 1, 1921, Homer Laughlin, Jr., and 
Ella West entered into a written agreement, a 
copy of which is hereto annexed as Exhibit B and 
made part hereof. 



6 Estate of Homer Laughlin, vs. 

c. The condition mentioned in the second para- 
graph of the August 1, 1921 agreement (Exhibit B) 

was duly complied with. About the day of 

September, Ella West duly executed and delivered 
to Homer Laughlin, Jr. the release, copy of which 
appears in Exhibit B following the agreement 
therein set forth. 

d. The Laughlin Building, mentioned in Exhibit 
B, is a building situated at No. 315 South Broad- 
way, Los Angeles. At all times subsequent to about 
August 1, 1921, it was the property of Homer 
Laughlin, Jr. The latter died on or about Decem- 
ber 27, 1932. The Laughlin Building was and is 
a part of his estate, which has been in process of 
administration in the Superior Court of the State 
of California in and for the County of Los Angeles 
since about [4] February 4, 1933, on which date 
the will of Homer Laughlin, Jr. was duly admitted 
to probate and Beach D. Lyon was appointed, and 
at all times since has been and is now, the duly 
appointed, qualified and acting administrator with 
the will annexed of said estate. 

e. In May, 1933, a dispute having arisen between 
Ella West on the one hand and the Estate of 
Homer Laughlin, Jr., deceased, on the other, as to 
her rights under the contract and assignment of 
August 1, 1921, a suit for declaratory relief was 
brought by Ella West in the Superior Court of 
the State of California in and for the Countv of 
Los Angeles, Ella West vs. Beach D. Lyon, et al, 
No. 356,776, that court having jurisdiction of the 
parties and of the subject matter, to which suit all 



Com. of Internal Hcvcntie 7 

persons having any interest in the subject matter 

were made parties. On the day of June, 

1933, the Court, in the declaratory relief suit, made 
its judgment, which judgment, omitting formal 
parts, reads as follows: 

"Now, Therefore, by Virtue of the Premises 
It Is Hereby Ordered, Adjudged, and Decreed 
that on the 1st day of August, 1921, Homer 
Laughlin assigned to the plaintiff Ella West 
One Hundred ($100) Dollars of the monthly 
rental due or to become due from the lessee 
of the ground floor of the Laughlin Building, 
which sum was to be paid to the plaintiff Ella 
West each month during the remainder of her 
natural life; that from and after said 1st day 
of August, 1921, Homer Laughlin had no right, 
title or interest in and to said sum of One 
Hundred ($100) Dollars so assigned to this 
plaintiff; that the defendants Beach D. Lyon, 
and Beach D. Lyon as Administrator with the 
Will annexed of the estate of Homer Laughlin, 
have no right, title or interest in and to the 
said sum of One Hundred ($100) Dollars of 
the monthly rental due or to become due from 
the lessee of the ground floor of the Laughlin 
Building, which sum of One Hundred ($100) 
Dollars was to be paid to the plaintiff, Ella 
West, each month during the remainder of her 
natural life, and which sum was assigned by 
Homer Laughlin to plaintiff." 



8 Estate of Homer Laughlin, vs. 

This judgment has never been appealed from, 
reversed or modified. It remains at this present 
date in full force and effect. 

f. By reason of the judgment, based on the 
August 1, 1921 assignment, and determining the 
rights of Ella West in respect of the matters men- 
tioned in the judgment, Ella West was given and 
at all times since that date, and during the year 
1942, owned and held a property interest in the 
Laughlin Building to the extent of $100 per month 
of the monthly rental arising from the ground floor 
thereof; that by reason of such facts the $100 per 
month payments to Ella West were and are ex- 
cludible or deductible from the gross income of 
the taxpayer arising from the ground floor of the 
Laughlin Building for the year 1942; that the 
gross and net income derived from the source just 
mentioned exceeded during the year 1942 the $1,200 
from the rentals thereof so paid to Ella West. 

6. The facts upon which petitioner relies as a 
basis for this proceeding, in so far as the sum of 
$9,600 paid to Ada Edwards Laughlin is concerned 
are as follows: 

a. On or about April 1, 1924, Homer Laughlin 
and his then wife, Ada Edwards Laughlin, entered 
into a property settlement agreement, which agree- 
ment was approved and confirmed in an interlocu- 
tory decree of divorce between those parties dated 
September 24, 1924, in Cause No. D28768 in the 
Superior Court of the State of California in and 
for the County of Los Angeles, and in a final decree 
duly made September 29, 1925, pursuant thereto. 



Com. of Internal Revenue 9 

The property settlement agreemenl of April 1, 
1924, contained among other provisione the fol- 
lowing: 

"1. The party of the first part covenants 
and agrees to pay to the party of the second 
part for her support and maintenance the sum 
of Eight Hundred Dollars ($800) per month 
during the term of her natural life; provided, 
however, that if the parties hereto should be 
divorced at any time in the future, and in such 
event the party of the second part should 
remarry, said monthly payments shall be re- 
duced to the sum of Three Hundred Dollars 
($300) per month. The said payments shall 
be made in cash, lawful money of the United 
States, beginning on the first day of May, 1924, 
and shall be made each month thereafter at the 
city of Los Angeles, California, on or before 
the 15th day of each succeeding month. ' : 

The parties of the first and second part referred 
to in the foregoing excerpt are respectively Homer 
Laughlin and Ada Edwards Laughlin. The latter 
is still living and has never remarried. Later pro- 
visions of the Agreement (paragraphs 9 and 10) 
provide for hypothecating the Laughlin Building 
to secure to Ada Edwards Laughlin the faithful 
performance of the contract by Homer Laughlin, 
Jr. Paragraph 10 provides in part: "The pay- 
ments herein provided to be made by the party of 
the first part to the party of the second part shall 
survive [7] the death of the party of the first part 
and shall be binding upon his estate.' 1 A copy of 



10 Estate of Homer Laughlin, vs. 

the decrees of divorce (interlocutory and final) in 
Cause No. D28768 in so far as they pertain to the 
matters and things hereinabove mentioned, is at- 
tached hereto as Exhibit C and made part hereof. 

b. As to the $9,600 paid to Ada Edwards Laugh- 
lin during the year 1942 by petitioner, the estate 
of her deceased former husband, Homer Laughlin, 
pursuant to the property settlement agreement and 
the decree of divorce above referred to, petitioner 
contends that this sum is deductible by the Estate 
of Homer Laughlin, deceased, pursuant to the pro- 
visions of Sections 22 (k), 23 (u), 161, 162, 163 and 
171 of the Internal Revenue Code. 

Wherefore, petitioner prays that The Tax Court 
of the United States hear this proceeding and de- 
termine that there is no deficiency in income taxes 
for the taxable year 1942, and grant such other and 
further relief as may be equitable in the premises. 

/s/ JOSEPH D. BRADY, 
/s/ WALTER L. NOSSAMAN, 
/s/ JOHN O. PALSTINE, 
/s/ STANLEY C. ANDERSON, 
433 South Spring Street, 
Los Angeles 13, California, 
Counsel for Petitioner. 



Com. of Internal Revenue 11 

State of California, 
County of Los Angeles — ss. 

Beach D. Lyon, being first duly sworn, says thai 
he is Administrator with the Will Annexed of the 
Estate of Homer Laughlin, and that affiant is duly 
authorized to verify the foregoing petition; that as 
such Administrator he has authority to act for the 
estate which is the petitioner herein; that he has 
read the foregoing petition, is familiar with the 
statements contained therein, and that the facts 
stated are true of his own knowledge, except as to 
the matters which are therein stated on his infor- 
mation or belief, and as to those matters that he 
believes it to be true. 

/s/ BEACH D. LYON. 

Subscribed and sworn to before me this 17th day 
of August, 1944. 

[Seal] JULIA M. PITZSIMMONS, 

Notary Public in and for the County of Los 
Angeles, State of California. 

My Commission Expires February 17, 1948. 



12 Estate of Homer Laughlin, vs. 

EXHIBIT A 

Treasury Department, Internal Revenue Service, 
417 South Hill Street, Los Angeles, 13, Cali- 
fornia 
Office of Internal Revenue Agent in Charge Los 
Angeles Division. LA:IT:90D:PB 

Jun 6 1944 

Estate of Homer Laughlin, Deceased 
Mr. Beach D. Lyon, Administrator 
315 South Broadway 
Los Angeles, 13, California 

Dear Mr. Lyon: 

You are advised that the determination of your 
income tax liability for the taxable years ended 
December 31, 1941 and 1942, discloses a deficiency 
of $8,647.89 for the taxable year ended December 
31, 1942, and an overassessment of $2,280.00 for the 
taxable year ended December 31, 1941, as shown in 
the statement attached. 

In accordance with the provisions of existing in- 
ternal revenue laws, notice is hereby given of the 
deficiency or deficiencies mentioned. 

Within 90 days (not counting Sunday or a legal 
holiday in the District of Columbia as the 90th day) 
from the date of the mailing of this letter, you may 
file a petition with The Tax Court of the United 
States, at its principal address, Washington, D. C, 
for a redetermination of the deficiency or defi- 
ciencies. 

Should you not desire to file a petition, you are 



Com. of Internal Revenue 13 

requested to execute the enclosed form and forward 
it to the Internal Revenue Agent in Charge, Los 
Angeles, California, for the attention of LA; Conf. 
The signing and filing of this form will expedite 
the closing of your return (s) by permitting an early 
assessment of the deficiency or deficiencies, and will 
prevent the accumulation of interest, since the in- 
terest period terminates 30 days after filing the 
form, or on the date assessment is made, whichever 
is earlier. 

Very truly yours, 

JOSEPH D. XUNAN, Jr. 

Commissioner, 

By /s/ GEORGE D. MARTIN 

Internal Revenue in Charge 
PB :vmc 
Enclosures : 
Statement 
Form of waiver 
Form 843 [10] 

Statement 

LA:IT:90D:PB 

Estate of Homer Laughlin, Deceased 
Mr. Beach D. Lyon, Administrator 
315 South Broadway 
Los Angeles, 13, California 

Tax Liability for the Taxable Years Ended 
December 31, 1941 and 1942 



14 Estate of Homer Laughlin, vs. 

INCOME TAX 

Year Liability Assessed < Overassessment Deficiency 

1941 $15,410.46 $17,690.46 $2,280.00 

1942 38,467.38 29,819.49 $8,647.89 



Total .... $53,877.84 $47,509.95 $2,280.00 $8,647.89 

In making this determination of your income 
tax liability careful consideration has been given 
to the report of examination dated October 30, 1943, 
to your protest dated February 5, 1944, and to the 
statements made at the conference held on February 
21, 1944. 

The overassessment shown herein will be made 
the subject of a certificate of overassessment which 
will reach you in due course through the office of 
the collector of Internal Revenue for your district, 
and will be applied by that official in accordance 
with section 322 (a) of the Internal Revenue Code, 
provided that you fully protect yourself against 
the running of the statute of limitations with re- 
spect to the apparent overassessment referred to 
in this letter, by filing with the collector of internal 
revenue for your district, a claim for refund on 
form 843, a copy of w T hich is enclosed, the basis of 
which may be as set forth herein. 

A copy of this letter and statement has been 
mailed to your representative, Mr. Walter L. Nos- 
saman, 433 South Spring Street, Los Angeles, 13, 
California, in accordance with the authority con- 
tained in the power of attorney executed by you. 



Com. of Internal Revenue 15 

ADJUSTMENTS TO NET INCOME 

Taxable Year Ended December 31, 1941 

Net income as disclosed by return $44,487.64 

Additional deduction: Legal expense 4,000.00 

Net income adjusted $40,4*7.64 

Explanation of Adjustment 
Legal expense accrued in this year, but paid and 
claimed as a deduction in the succeeding year, is 
allowed for this year since your return was ren- 
dered on the accrual basis. 

COMPUTATION OF TAX 
Taxable Year Ended December 31, 1941 

Net Income Adjusted $40,487.64 

Less: Personal exemption 7.">0.00 

Balance (surtax net income) $39,737.64 

Net income subject to normal tax $39,737.64 

Normal tax at 4% on $39,737.64 $ 1,589.51 

Surtax on $39,737.64 13,820.95 

Total income tax $15,410.46 

Correct income tax liability $15,410.46 

Income tax assessed: 

Original, account No. 185776 17,690.46 

Deficiency of income tax $ 2,280.00 



16 Estate of Homer Laughlin, vs. 

ADJUSTMENTS TO NET INCOME 
Taxable Year Ended December 31, 1942 

Net income as disclosed by return $55,471.51 

Additional income and unallowable deductions : 

(a) Gross income from rents $1,200.00 

(b) Legal expense disallowed 4,000.00 

(c) Equipment costs disallowance 740.00 

(d) Payment to Ada Edwards 

Laughlin disallowed 9,600.00 15,540.00 



Total $71,011.51 

Additional deductions : 

(e) Legal expense $3,500.00 

(f) Depreciation 308.33 



Net income adjusted $67,203.18 

Explanation of Adjustments 

(a) There is restored to gross income, or dis- 
allowed as a deduction therefrom, under the appli- 
cable provisions of the Internal Revenue Code, the 
exclusion or deduction of $1,200.00 shown in Sched- 
ule C of your return as "Less assignment of rent 
to Ella West." 

(b) Legal expense accrued in the preceding year, 
but paid and claimed as a deduction in this year, 
is disallowed for this year since your return was 
rendered on the accrual basis. This expense has 
been allowed as a deduction for the preceding year 
herein. 

(c) The cost of equipment claimed as a deduc- 
tion is disallowed; sections 24(a)(2) and (3) of 
the Internal Revenue Code. See also adjustment 
(f) below. 

(d) The deduction of $9,600.00 claimed for pay- 



Com. of Internal Revemu 17 

rnent to Ada Edwards Lauglilin on account of 
"property settlement agreement with [13] Homer 
Laughlin — $800.00 per month for life" is not allow- 
able 1 under the Internal Revenue Code. 

(e) Legal expense accrued in this year, bul 
paid and claimed as a deduction in the succeeding 
year, is allowed for this year since your return 
was rendered on the accrual basis. 

(f) Depreciation for ten months is allowed at 
the rate of 50 per cent per annum on the cost of 
equipment disallowed under adjustment (c) above. 

COMPUTATION OF TAX 

Taxable Year Ended December 31, 1942 

Net Income Adjusted $07,203.18 

Less: Personal exemption 500.00 



Balance (s net income) $66,703.18 

Net income subject to normal tax $66,703.18 

Normal tax at 6% on $66,703.18 $ 4,002.19 

Surtax on $66,703.18 34,465.19 

Total income tax $38,4 17.38 

Correct income tax liability $38,467.38 

Income tax assessed: Original account No. 37359 29,819.49 



Deficiency of income tax $ 8,647.89 

EXHIBIT B 
I, Ella West, in consideration of Five Hundred 
Dollars ($500.00) in hand paid to me, and in fur- 
ther consideration of an assignment of One Hundred 
Dollars ($100.00) per month of the rent to be paid 
by the lessee of the ground floor of the Laughlin 
Building, and in further consideration of the as- 
sumption of Homer Laughlin, Jr. to pay me the 



18 Estate of Homer Laughlin, vs. 

said sum of One Hundred Dollars ($100.00) per 
month during the remainder of my natural life, do 
hereby release the said Homer Laughlin, Jr., as 
Trustee, Guendolen V. Laughlin, and all of the 
property comprising the estate of Homer Laughlin, 
deceased, late of Los Angeles, California, from the 
payment of the annuity provided for in the will 
and decree of distribution in the estate of said 
Homer Laughlin, hereby releasing absolutely any 
claim of every character either against said persons 
or the property of said estate, the said lessee having 
recognized the said assignment and having agreed 
to pay to me the said sum monthly of the rent due 
and payable to the said Laughlin for the said ground 
floor of said building. 

This agreement is to be placed in escrow and 
carried into effect and the said sum in cash to be 
paid to me by the Title Insurance & Trust Com- 
pany in connection with the escrow under which 
said Laughlin is purchasing from the said Guen- 
dolen V. Laughlin all of her interest in said 
Laughlin Building and making a loan in order to 
complete [15] said purchase, and is contingent upon 
the consummation of the said deal through the 
Title Insurance & Trust Company. 

(Notarial acknowledgment dated August 1, 1921.) 



Com. of Internal Revenue 19 

ELLA WEST 

I, Ella West, for value received from Homer 
Laughlin, Jr., do hereby release the said Homer 
Laughlin Jr., as Trustee, Guendolen V. Laughlin, 

and all of the property comprising the estate of 
Homer Laughlin, deceased, late of Los Angeles, 
California, from the payment of the annuity pro- 
vided for in the will and decree of distribution in 
the estate of said Homer Laughlin, hereby releasing 
absolutely any claim of every character either 
against said persons or the property of said estate. 

In Witness Whereof I have hereunto set my hand 
this day of September, 1921. 

ELLA L. WEST. [16] 



EXHIBIT C 

Laughlin vs. Laughlin 
D 28,768 

Filed 1924 April 15, 1924 
Order of default May 9, 1924 

Interlocutory — September 24, 1924. 

* * * That on the first of April 1924, plaintiff 
and defendant entered into a property settlement 
agreement, by the terms of which all property 
rights, and maintenance of the plaintiff were de- 
termined and agreed upon, 

Wherefore, it is hereby Ordered, Adjudged and 



20 Estate of Homer Lauglilin, vs. 

Decreed that the plaintiff is entitled to a divorce 
from the defendant; that when one year shall have 
expired, after the entry of this interlocutory judg- 
ment, a final judgment and decree shall be entered, 
granting a divorce herein, wherein and whereby 
the bonds of matrimony heretofore existing between 
said plaintiff and said defendant shall be dissolved; 

And it is further ordered, adjudged and decreed 
that the said property settlement agreement be, 
and the same hereby is, ratified, approved and con- 
firmed, and is hereby made a part of this decree 
by reference, and that the same shall be made a 
part of and incorporated in the final decree in this 
matter. [17] 

Pinal Judgment of Divorce 

It is further ordered, adjudged and decreed that 
that certain property settlement agreement, referred 
to in the interlocutory decree in this action and by 
reference made a part thereof, is hereby ratified, 
approved and confirmed, and the property of the 
parties hereto is hereby assigned in accordance 
with the terms of said agreement and the other 
rights and obligations of the parties hereto are 
assigned, determined and adjudged in accordance 
with the terms of said agreement, which agreement 
is hereby made a part of this judgment and is in 
words and figures as follows, to wit : 



■*•*•* 



[Endorsed] : Received and filed Aug. 25, 1944. 



Com. of Internal l\< venue 21 

[Title of Tax Court and Cause.] 

ANSWER 

The Commissioner of Internal Revenue, by his 
attorney, J. P. Wenchel, Chief Counsel, Bureau of 
Internal Revenue, for answer to the petition of 
the above-named taxpayer, admits and denies as 
follows : 

1 and 2. Admits the allegations contained in 
paragraphs 1 and 2 of the petition. 

3. Admits that the taxes in controversy are 
income taxes for the calendar year 1942 ; denies the 
remaining allegations contained in paragraph 3 of 
the petition. 

4. Denies the allegations of error contained in 
subparagraphs (a) and (b) of paragraph 4 of the 
petition. 

5. Denies the statements in subparagraphs (a) 
to (f), inclusive, of paragraph 5 of the petition 
for the reason that respondent lacks sufficient in- 
formation from which to form a belief as to the 
truth or correctness thereof. 

6. Denies the statements in subparagraphs (a) 
and (b) of paragraph 6 of the petition for the 
reason that respondent lacks sufficient information 
from which to form a belief as to the truth or cor- 
rectness thereof. 

7. Denies each and every allegation contained in 
the petition not hereinbefore specifically admitted 
or denied. 



22 Estate of Homer Laughlin, vs. 

Wherefore, it is prayed that the determination 
of the Commissioner be approved. 

/s/ J. P. WENCHEL ECC 

Chief Counsel, 
Bureau of Internal Revenue. 

Of Counsel: 

B. H. NEBLETT, 

Division Counsel. 

EARL C. CROUTER, 

B. M. COON, 

Special Attorneys, 

Bureau of Internal Revenue. 

BMC/vc 9/18/44. 

[Endorsed]: Received and filed Sep. 23, 1944. 



Com. of Internal Revenue 23 

Before the Tax Court of the United States 

Docket No. 5891 

In the Matter of: 

ESTATE OF HOMER LAUGHLIN, Deceased, 
BEACH D. LYON, Administrator With the 
Will Annexed, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

Room 229, Post Office and Federal Bldg., Spring, 
Temple and Main Streets, Los Angeles, Cali- 
fornia, Monday, June 10, 1946 — 11 :15 a. m. 

(Met pursuant to notice.) 

Before: Honorable Eugene Black, 
Judge. 

Appearances : 

Walter L. Nossaman, Esq., 631 Title Insurance 
Bldg., Los Angeles, California, appearing on behalf 
of Estate of Homer Laughlin, Deceased, Beach D. 
Lyon, Administrator with the Will annexed, Peti- 
tioner. 

E. A. Tonjes, Esq., (Honorable J. P. Wenchel, 
Chief Counsel, Bureau of Internal Revenue), ap- 
paring on behalf of the Commissioner of Internal 
Revenue, Respondent. 



24 Estate of Homer Laughlin, vs. 

PROCEEDINGS 

The Clerk : 5891, Estate of Homer Laughlin. 

Mr. Nossaman: Walter L. Nossaman for the 
petitioner. 

Mr. Tonjes: E. A. Tonjes for the respondent. 

Mr. Nossaman: The facts have been stipulated. 
We are ready to submit it upon the stipulation, if 
that is agreeable with the Court. 

The Court: Very well. We will receive your 
stipulation at this time and your submission of the 
case. 

Mr. Nossaman : What about briefs, your Honor ? 

The Court : Do you wish to make a brief state- 
ment of the issues in this case before you file the 
stipulation ? 

Mr. Nossaman: I should be glad to if your 
Honor wishes to take the time. 

The Court: Yes. 

Mr. Nossaman: I question whether it is neces- 
sary but if the Court prefers 

The Court: I would like to have a brief state- 
ment. 

Opening Statement 
On Behalf of the Petitioner 

Mr. Nossaman: It involves two items of deduc- 
tion for the year 1942. The Petitioner is a Probate 
Estate. It is the Estate of Homer Laughlin, de- 
ceased, which is in the course of the administration 
in the Superior Court for Los Angeles County. 

The controversy involves two items, both of them 
items of deduction or of exclusion. 



Com. of Interned "Revenue 25 

The first item is $1200.00 in amount and consists 
of a so-called annuity paid by the Estate to one 
Ella West during the year in question. The circum- 
stances surrounding that I will briefly state as 
follows : 

Homer Laughlin, whom I will designate as Homer 
Laughlin, Jr., to differentiate him from his father 
Homer Laughlin, Sr., who died in 1913, was, with 
his sister Gwendolyn, heir and legatee of his father's 
estate of a substantial amount. 

Under his father's will, which was probated in 
1913, as I recall it, one Ella West, designated as a 
niece in the will, was given the sum of $100.00 per 
month during her life. Upon the death of Homer 
Laughlin, Sr. in 1913 his estate was probated and 
Homer Laughlin, Jr. was not only with his sister 
the legatee and heir of the estate, but was with her 
the executor. It was impossible, of course, to close 
the estate until some disposition had been made 
of this Ella West claim. 

It was taken care of in the following manner: He 
entered into a contract with Ella West whereby he 
assigned to her $1200.00 per year, $100.00 per 
month, out of the rents to be received from the 
ground floor of the Laughlin Building, a building 
here in this city, which payments were to continue 
during the life of Ella West. 

He obligated himself to make those payments, but 
the crux of it is that he assigned to her that sum 
out of the rentals to be received from the ground 
floor of that building. The estate was distributed in 
due course to Homer Laughlin, Jr. and his sister. 



26 Estate of Homer Laughlin, vs. 

At about the time this contract was made with 
Ella West, Homer Laughlin purchased from his sis- 
ter her interest in the Laughlin Building, so that 
from that time on he was the sole owner of the 
Laughlin Building. 

Homer Laughlin died in 1932 and in the course of 
administration of his estate, of which Mr. Beach 
D. Lyon w T as and is the administrator with will 
annexed, a controversy arose between Ella West 
and the Estate as to what her rights were under 
this contract of August 1, 1921. She brought a suit 
for declaratory relief, making the estate and cer- 
tain other parties, including the then lessee of the 
ground floor, parties defendant. The Court, in a 
judgment entered in 1933, decreed that she was 
entitled to $100.00 per month out of the rentals to 
be received from the ground floor of the Laughlin 
Building during her life time. That is the status 
of the matter at the present time. 

These sums were duly paid during the year 1942 
as they have been throughout the period of admin- 
istration of the estate. A deduction or an exclusion 
was claimed for these [26] payments upon the 
ground that Ella West had something in the nature 
of a rent charge or at any rate it is a property 
interest, property right in the ground floor of the 
Laughlin Building, represented by the amount of 
these agreed payments. And to that extent the pay- 
ments do not belong to the Estate. On that theory 
they would be an exclusion, rather than a deduction. 

We contend, however, if they are not an exclusion 
they are, under the circumstances, a proper deduc- 



Com. of Internal Revernu 27 

tion. The rents were collected by the Estate and it 
is shown by the stipulation that the rentals during 
the year 1944, from the ground floor of the Laughlin 

Building, the gross and net rentals were more than 
sufficient to pay this sum. That is the first item. 

The other item is the sum of $9600.00, which was 
paid to Ada Edwards Laughlin, a divorced wife of 
this decedent, Homer Laughlin, Jr., under the fol- 
lowing circumstances : 

On April 1, 1924, Homer Laughlin, Jr. entered 
into an agreement with his wife whereby he agreed 
to pay her the sum of $800.00 per month during 
her life, for her support and maintenance. It was 
to be reduced to $300.00 if she ever married, but that 
has not occurred. 

That agreement was approved and confirmed by 
the Superior Court for this County in a suit for 
divorce which was instituted at almost that same 
time by Mrs. Laughlin [27] against Homer 
Laughlin. 

Your Honor will recall that in the year 1942 
Congress came to the relief of husbands who had 
been paying alimony and in Section 23-U of the 
Internal Revenue Code provided that sums paid 
under the circumstances of this case — I think I am 
perfectly justified in stating that — would be de- 
ductible by the husband and would be considered 
as income to the wife, upon which she would pay 
an income tax. 

There could be no possible question of the deduc- 
tibility of excludability — it makes no difference 
which — of these items on behalf of Homer Laughlin 



28 Estate of Homer Lauglilin, vs. 

if he were living. The sole question arises under 
a regulation which the Commissioner has seen fit to 
adopt and which we consider erroneous, to the effect 
the deduction or exclusion cannot he allowed to an 
estate; that is the question involved as to the 
$9600.00 item. 

The Court: Very well. Do you have any state- 
ment to make, Mr. Tonjes? 

Mr. Tonjes: A brief one, your Honor. 

Opening Statement 

On Behalf of the Respondent 

(By Mr. Tonjes) 

Mr. Tonjes: Your Honor, I will state generally 
the position of the Respondent is, with respect to 
both the $100.00 and the $9600.00 payments, that 
neither one of them constitute proper exclusions 
from income and neither one of [28] them con- 
stitute a deduction from income because they don't 
constitute deductions because they are payments in 
satisfaction of an obligation of the Estate and there- 
fore are not deductible from the income of the 
Estate. 

The parties have signed a stipulation, your 
Honor, which sets forth all the facts upon which 
they both rely. I will file a copy of that with the 
Court and might I ask your Honor at this time 
that one of the exhibits, being a copy of the income 
tax return of the Trustee, that I have the privilege 
of withdrawing that and substituting a photostat 
copy for it? 

The Court: That permission will be granted. 



Com. of Internal Eeventu 29 

And the stipulation of facts will be received as the 

evidence in the case. 

Do you wisli to submit briefs under the rules? 
The rules permit either party to file their briefs 
within 45 days. 

Mr. Tonjes: I think, your Honor, if it is ac- 
ceptable to the Court, I would like the privilege of 
filing a reply brief. I think it might sharpen the 
issues a little bit if the petitioner files his opening- 
brief and I reply to it. However, if the Court 
feels 

The Court: Usually where the facts are all stip- 
ulated we make the time for filing briefs, to file 
them simultaneously. If you desire the other method 
the Court has no objection. 

Mr. Nossaman : It is immaterial to me, except I 
assume in that case I have the privilege of reply. 

The Court: Yes, you will. 

Mr. Nossaman: Very well. That is satisfactory. 

The Court: The 45 days, I suppose, will be suf- 
ficient time for the petitioner to file his opening 
brief? 

Mr. Nossaman: That will be ample. 

The Court: Which will be July 25th, I believe. 
That will be 20 more days in June and 25 in July. 

The respondent may have until August 25th in 
which to file his brief, and then you may have until 
September 15th in which to file an answering brief 
to the respondent's reply. 

Mr. Nossaman: That will give us 20 days, your 
Honor? 

The Court : Yes. 



30 Estate of Homer Laughlin, vs. 

Mr. Nossaman: That will be satisfactory. 

The Court: I had better give you 20. It is 
usually 15 in nearby points. 

Mr. Nossaman: The transmission takes so long. 

The Court: Yes. Very well. The time for filing 
briefs will be fixed as I have stated. 

(Whereupon, at 11:30 o'clock a.m., Monday, 
June 10, 1946, the hearing in the above-entitled 
matter was colsed.) 

[Endorsed] : Filed July 3, 1946. [30] 



[Title of Tax Court and Cause.] 

STIPULATION OF FACTS 

It is hereby stipulated between the parties hereto, 
by their respective counsel, that the following facts 
shall be taken as true, without prejudice to the 
right of either party to introduce other evidence 
not inconsistent therewith: 

(1) Petitioner is a probate estate in process of 
administration under the jurisdiction of the Su- 
perior Court of the State of California in and for 
the County of Los Angeles, being Probate Cause 
No. 132875 therein. The return of said estate for 
the taxable period here involved was filed with the 
Collector for the Sixth District of California on or 
before March 15, 1943. 

(2) A copy of the notice of deficiency which oc- 
casioned the present proceeding is attached to the 



Com. of Internal Revemu 31 

petition [31] herein as Exhibit A and is hereby 

made part of this stipulation as Exhibit A. 

(3) Homer Laughlin, ttr., father of Homer 
Laughlin, Jr., died on or about January 10, 1913, 
leaving a last will and testament dated August 30, 
1909, duly admitted to probate on January 29, 1913, 
in the Superior Court of the State of California in 
and for the County of Los Angeles, in Probate 
Cause No. 22,692, which will contained among other 
provisions the following: 

"Second: I give, devise and bequeath unto 
my nieces, Ella West and Nancy Mcintosh, each 
the sum of one hundred dollars ($100) per 
month, payable quarterly to each of them dur- 
ing their natural life." 

After certain other legacies, bequests and de- 
vises, the will gave the residue of the estate equally 
to decedent's son and daughter, Homer Laughlin, 
Jr. and Guendolyn Virginia Laughlin, further pro- 
viding that Homer Laughlin, Jr. should hold 
Guendolyn 's share in trust for her, distributing it 
to her, one-half at thirty years of age, one-half at 
forty, with remainders over if she died before dis- 
tribution of her share. The will appointed Homer, 
Jr. and Guendolyn as executor and executrix with- 
out bond. 

(4) On August 1, 1921, Homer Laughlin, Jr. and 
Ella West entered into a written agreement, a copy 
of which, omitting notarial acknowledgment, is 
attached to the petition herein as Exhibit B and is 
hereby made part of this stipulation [32] as Exhibit 



32 Estate of Homer Laughlin, vs. 

B. The transaction evidenced by Exhibit B was en- 
tered into by Homer Laughlin, Jr. for the purpose 
of obtaining, and he did thereby obtain, her consent 
to distribution of the estate, which was made there- 
after in due course, pursuant to court decree. 

(5) The condition mentioned in the second para- 
graph of the August 1, 1921, agreement (Exhibit B) 
was duly complied with. In September, 1921, Ella 
West duly executed and delivered to Homer Laugh- 
lin, Jr. the release of the estate and the residuarv 
legatees, copy of which release appears in Exhibit 
B, following the agreement therein set forth. 

(6) The Laughlin Building, mentioned in Ex- 
hibit B, is a building situated at No. 315 South 
Broadway, Los Angeles, California. From about 
August 1, 1921, it was at all times the property of 
Homer Laughlin, Jr. He acquired a one-half inter- 
est in said building as a devisee under his father's 
will, and purchase the other half from his sister, 
Guendolyn, the funds for such purchase being ob- 
tained by the mortgage on said building to Metro- 
politan Life Insurance Company, which mortgage 
is referred to in Exhibit F. Homer Laughlin, Jr. 
died on or about December 27, 1932. The Laughlin 
Building was and is a part of his estate, the peti- 
tioner, which has been in process of administration 
in the Superior Court of the State of California in 
and for the County of Los Angeles since about 
February 4, 1933, on which date the will of Homer 
Laughlin, Jr. was duly admitted to probate, and 
Beach D. [33] Lyon was appointed, and at all times 



Com. of Internal Revenut 33 

since has been and is now, the duly appointed, quali- 
fied and acting administrator with the will annexed 
(»(' said estate. 

(7) In May, 1933, a dispute having arisen !>e- 
tween Ella West on the one hand and the Estate of 
Homer Laughlin, Jr., deceased, on the other, as to 
her rights under the contract and assignment of 
August 1, 1921, a suit for declaratory relief was 
brought by Ella West in the Superior Court of the 
State of California in and for the County of Los 
Angeles, Ella West vs. Beach D. Lyon, et al, No. 
356,776, that court having jurisdiction of the parties 
and of the subject matter, to which suit all persons 
having any interest in the subject matter were made 
parties. Copy of the complaint in said action 
(except that the verification, also the August 1, 1921 
agreement, Exhibit 1) hereto, is omitted as indi- 
cated in the attached copy) is hereto attached 
marked Exhibit C. Copy (omitting verification) of 
the defendant Administrator's answer in said suit 
is hereto annexed, marked Exhibit D. On the 28th 
day of June, 1933, the Court in the declaratory re- 
lief suit, made its judgment determining the issues 
between plaintiff and certain defendants. Copy of 
this judgment is hereto attached, marked Exhibit E. 
On July 7, 1933, the court made a further judgment 
in said suit, determining the issues between plain- 
tiff and the remaining defendants. Copy of this 
judgment is hereto attached, marked Exhibit E-l. 
Neither of said judgments has ever been appealed 
from, [34] reversed or modified, and both judg- 



34 Estate of Homer Laughlin, vs. 

ments remain at date hereof in full force and 
effect. 

(8) During the taxable year 1942, petitioner 
paid to Ella West the sum of $1,200, pursuant to 
the agreement of August 1, 1921, between Homer 
Laughlin, Jr. and Ella West (Exhibit B) and the 
Superior Court judgment of June 28, 1933 (Exhibit 
E). This sum was paid out of rentals received by 
petitioner from the ground floor of the Laughlin 
Building during that year. The gross and net 
rentals received by petitioner from that source for 
and during the taxable year 1912 were greatly in 
excess of the sum of $1,200. The lease to Grand 
Central Public Market, Inc., referred to in Exhibit 
E-l, had terminated on October 31, 1939, and said 
corporation was not in possession of the ground 
floor of the Laughlin Building after about that elate. 
After the termination of said lease on October 31, 
1939, and at all times subsequent thereto until after 
December 31, 1942, petitioner as lessor from time 
to time leased the ground floor of the Laughlin 
Building, formerly leased to Grand Central Public 
Market, Inc., to various persons who conducted the 
business of a public market therein. In negotiating 
and executing said leases, Ella West was not con- 
sulted, nor did she in any manner participate 
therein. 

(9) In the federal estate tax return, Form 706, 
filed by the Estate of Homer Laughlin, the peti- 
tioner's [35] decedent, there was claimed under 
Schedule I, entitled " Debts of Decedent," the fol- 
lowing item: 



Com. of Internal Revenue 35 

"Ella West ($100 per mo. Expectancy 11 year-. > 
$16,610.00" In the final determination of decedant's 

estate tax liability the Ella West claim was allowed 
as a deduction in the total amount of $9,194.05, 
such amount being the present value at the dale 
of decedent's death of an annuity of £100 per month 
payable during the expected life of Ella West, who 
was then sixty-six*, years of age. 

(10) On or about April 1, 1924, Homer Laughlin 
and his then wife, Ada Edwards Laughlin, entered 
into a property settlement agreement, which agree- 
ment was approved and confirmed in an interlocu- 
tory decree of divorce between those parties dated 
September 24, 1924, in Cause No. D28768 in the 
Superior Court of the State of California in and 
for the County of Los Angeles, and in a final decree 
duly made September 29, 1925, pursuant thereto. 
Copy of the property settlement agreement of 
April 1, 1924, is hereto attached, marked Exhibit 
F. A copy of the decrees of divorce (interlocutory 
and final) in Cause No. D28768 in so far as they 
pertain to the matters and things hereinabove men- 
tioned, is hereto attached as Exhibit G. During his 
lifetime, Homer Laughlin made to Ada Edwards 
Laughlin the payments of $800 per month which he 
agreed to make in the agreement of April 1, 1924. 

(11) Ada Edwards Laughlin is living at date 
hereof and has never remarried. The Homer Laugh- 
lin Building, referred to in Exhibit F (referred to 
in Exhibit B as the Laughlin Building) was not 
sold by Homer Laughlin, Jr., nor has it beet) sold 



36 Estate of Homer Lauglilin, vs. 

by his estate. The trust fund referred to in Para- 
graph (9) of Exhibit F has never been established, 
nor has the insurance policy therein referred to, 
guaranteeing Homer Lauglilin, Jivs performance 
of the terms of the April 1, 1924, agreement (Ex- 
hibit F), ever been furnished. 

(12) During the taxable year 1942, petitioner 
paid to Ada Edwards Lauglilin the sum of $9,600 
($800 per month) pursuant to the agreement of 
April 1, 1924, between Homer Lauglilin, Jr. and 
Ada Edwards Lauglilin (Exhibit F) and the court 
decrees (interlocutory and final) in the divorce 
action of Laughlin v. Laughlin (Exhibit G). 

(13) In Schedule I, "Debts of Decedent," of 
the federal estate tax return of the Estate of Homer 
Laughlin, Jr., deceased, the following item was 
claimed as a deduction: 

"Indebtedness in favor of Ada Edwards 
Lauglilin, in pursuance of Property Settlement, 
dated April 1, 1924, approved by Decree of 
Superior Court of the State of California, in 
and for the County of Los Angeles, and secured 
as a lien on the building, subject to Trust Deed 
in favor of Metropolitan Life Insurance Co. 
(To return $9600.00) Expectancy 16 years, 
$152,480.00." 

In the first audit of the return, this item was 
reduced by the Commissioner to $101,259.35. It was 
later [37] eliminated by the Commissioner as a 
deduction in the manner hereinafter set forth. 



Com. of Internal R( vi nue 37 

In said return, certain expenses were claimed as 
deductions, as follows: Attorneys' fees, $12,026.36; 
miscellaneous administration expenses, $23.55. These 
items were allowed by the Commissioner, in his 

tirst examination of the return, in the respective 
amounts of $11,152.59 and $790.55. Certain items of 
expense, namely, attorneys' fees and miscellaneous 
administration expenses, were incurred after the 
first examination of the return. 

Petitioner on October 22, 1938, filed claim for 
refund in the amount of $2,500 on account of such 
omitted expense items. The Commissioner adjusted 
the amounts theretofore claimed and allowed on 
account of attorneys' fees and miscellaneous admin- 
istration expenses the respective amounts of $18,- 
027.48 and $1,065.66, and made an adjustment for 
additional debts shown to have been owing by the 
decedent, but rejected the claim for refund for the 
assigned reason that the above amount, $101,259.35, 
representing decedent's liability on the separation 
agreement of April 1, 1924 (Exhibit F) had been 
erroneously included as a deduction in the prior 
determination of the estate tax liability. Copy of the 
Commissioner's letter of October 25, 1939, rejecting 
the refund claim, is hereto attached, marked Exhibit 
IT. Petitioner has begun no action to recover on 
the rejected [38] claim, and any such action is now 
barred by the statute of limitations. Respondent 
has not made or attempted to make any additional 
assessment in respect of the claimed erroneous 
allowance of the deduction based on the April 1, 
1924, agreement. 



38 Estate of Homer Laughlin, vs. 

(14) Attached hereto as Exhibit I is copy of 
petitioner's 1942 income tax return. 

(15) Homer Laughlin, Jr. did not possess on 
April 1, 1924, or at any time thereafter during the 
continuance of the marriage between him and Ada 
Edwards Laughlin, any substantial amount of com- 
munity property, his property consisting of prop- 
erty given to him by or inherited by him from his 
father, Homer Laughlin, Sr. 

Dated: June 5, 1946. 

/s/ W. L. NOSSAMAN, 

Counsel for Petitioner. 

/s/ J. P. WENCHELL, ECC 

Chief Counsel, Bureau of 
Internal Revenue, Counsel 
for Respondent. [39] 






Com. of Inti rnai lu ventu 39 

EXHIBIT C 

In the Superior Court of the State of California 
in and for the County of Los Angela 

No. 356776 

ELLA WEST, 

Plaintiff, 

vs. 

BEACH D. LYON, BEACH D. LYON as Ad- 
ministrator with the Will Annexed of the 
Estate of Homer Laughlin, Deceased, GRAND 
CENTRAL PUBLIC MARKET, INC., a 
California corporation, JOHN DOE ONE, 
JOHN DOE TWO, CITIZENS NATIONAL 
TRUST AND SAVINGS BANK OF LOS 
ANGELES, a national banking association, as 
Trustee, JOHN CORPORATION, a corpora- 
tion, JANE DOE ONE, JANE DOE TWO, 
JOHN ROE CORPORATION, a corporation, 
as Trustee, 

Defendants. 

COMPLAINT FOR DECLARATORY RELIEF 

Comes now the plaintiff above named and for 
cause of action against the defendants alleges as 
follows : 

I. 

That the defendant Grand Central Market, Inc. 
is now and at all times mentioned herein was a 
corporation duly organized and existing under and 
by virtue of the laws of the State of California; 



40 Estate of Homer Laughlin, vs. 

that the defendant Citizens National Trust and 
Savings Bank of Los Angeles is a national banking- 
association duly organized and existing under and 
by virtue of the laws of the United States of 
America; that the defendants John Corporation, a 
corporation, and John Roe Corporation, a corpora- 
tion, are corporations [40] duly organized and ex- 
isting; and that Homer Laughlin, also known as 
Homer Laughlin, Jr., who were one and the same 
persons, died testate on or about the 27th day of 
December, 1932, in the County of Los Angeles, State 
of California, and that at the time of his death he 
was a resident of the County of Los Angeles, State 
of California, and left an estate therein; that the 
will of Homer Laughlin was thereafter duly and 
regularly admitted to probate by order of the Su- 
perior Court of said Los Angeles County, and that 
on or about the 4th day of February, 1933, the de- 
fendant Beach D. Lyon was duly and regularly ap- 
pointed as Administrator with the Will Annexed 
of his estate; that thereafter said Beach D. Lyon 
duly qualified as such Administrator with the Will 
Annexed, and that the defendant Beach D. Lyon 
is now the duly appointed, qualified and acting Ad- 
ministrator with the Will Annexed of the Estate 
of said Homer Laughlin, Deceased, and that his 
letters have not been revoked. 

II. 

That on or about the 1st day of August, 1921, 
and for a considerable period of time theretofore, 
Homer Laughlin, Jr., w r as the owner of the building 



Com. of Internal Ttevenue 41 

known as the Laughlin Building, and the owner - 

the Lessor's interest in a lease of the Ground Floor 
of said Laughlin Building, wherein the def< udant 
Grand Central Public Market, In--., was named the 
Lessee. That said lease is still in existence, and, 
according to its terms and the terms [41] of a re- 
newal thereof, will continue until the first day of 
November, 1939. That the rents specified and re- 
served in said lease to be paid by Lessee to the 
Lessor exceeds the sum of One Hundred Dollars 
($100.00) per month. 

III. 

That on or about the 1st day of August, 1921, 
the plaintiff, Ella West, released the said Homer 
Laughlin, Jr., as Trustee, and all of the property 
comprising the estate of Homer Laughlin, Sr., de- 
ceased, from the payment of an annuity pi dded 
for in the will and in the decree of distribution 
entered in the estate of said Homer Laughlin, Sr., 
deceased, in consideration of said Homer Laughlin, 
Jr., assigning to this plaintiff the sum of $100.00 
per month of the rental to be paid by the Lessee 
of the Ground Floor of the Laughlin Building, and 
in consideration of said Homer Laughlin, Jr., agree- 
ing to pay said sum of $100.00 per month during 
the remainder of the natural life of this plaintiff, 
a copy of which agreement is in the following words 
and figures, to wit : 

[Here is inserted agreement of August 1, 
1921, between Homer Laughlin, Jr., and Ella 
West, which agreement is Exhibit B.] 



42 Estate of Homer Laughlin, vs. 

IV. 

That thereafter and on or about the 26th day 
of August, 1921, Homer Laughlin, Jr., made, exe- 
cuted and delivered to the Grand Central Public 
Market, Inc., an order to pay $100.00 per [42] 
month to Ella West during her natural life, from 
the rent reserved in the lease heretofore referred 
to, a copy of which order is in the following words 
and figures, to wit: 

"Los Angeles, California. 
August 26th, 1921. 
Grand Central Public Market, Inc. 

You are hereby authorized and directed to 
pay, as long as your lease on the premises Lots 
A and B Homer Laughlin Subdivision of Block 
8, Ord's Survey, is in force, to Nancy L. West 
the sum of $150.00 per month during her nat- 
ural life, and to Ella West the sum of $100.00 
per month during her natural life, the said 
payments to be made from the rents due me 
and are to be deducted by you from the lease 
moneys monthly, said payment to begin on the 
1st day of October, 1921. 

HOMER LAUGHLIN, JR. 
Duplicate 
Accepted : 

GRAND CENTRAL PUBLIC 
MARKET, INC. 
By E. E. SELLERS 

President 
By U. G. PURINTON 
Secretary 
(Corporation Seal)" 



Com. of Internal Revenue 43 

and that thereafter the defendant Grand Central 
Public Market, Inc., accepted said order and agreed 
to pay said sum of $100.00 per month from the 
rental due to Homer Laughlin, or his assignee or 

successors in interest, to this plaintiff, and that 
thereafter and up to and including the 1st day of 
December, 1932, [43] the defendant Grand Central 
Public Market, Inc., paid or caused to be paid to 
this plaintiff the sum of $100.00 per month, said 
sum of $100.00 being part of the rental due the 
Lessor under said lease for the use of the ground 
floor of the Homer Laughlin Building; that from 
and after the first day of December, 1932, the de- 
fendants and each of them refused to pay this plain- 
tiff the said sum of $100.00 per month, in accord- 
ance with the terms of the said agreements herein- 
before set forth. 

V. 

That an actual controversy relating to the legal 
rights and duties of the respective parties in in- 
terest to the agreements hereinbefore set forth and 
in and to the payment of said sum of $100.00 per 
month assigned by said Homer Laughlin to this 
plaintiff has arisen in the following particulars, to 
wit: That the defendant Grand Central Public Mar- 
ket, Inc., has refused and still refuses to pay the 
said sum of $100.00 per month so assigned to this 
plaintiff in accordance with the second agreement 
set forth in paragraph IV hereof. That the de- 
fendant Beach D. Lyon and the defendant Beach 
D. Lyon as Administrator with the Will Annexed 



44 Estate of Homer Laughlin, vs. 

of the Estate of Homer Laughlin, Deceased, claims 
that said sum of $100.00 per month so assigned by 
said Homer Laughlin from the tenant in possession 
of the Ground Floor of the Laughlin Building con- 
stitutes an asset of the estate of Homer Laughlin, 
Jr., and that he as Administrator with the Will 
Annexed of the Estate of Homer Laughlin, De- 
ceased, is entitled to collect all of the rent [44] due 
from the Grand Central Public Market, Inc., the 
tenant of the Ground Floor of the Laughlin Build- 
ing. That the defendants, John Doe One, John Doe 
Two, Citizens National Trust and Savings Bank of 
Los Angeles, a national banking association, as 
Trustee, John Corporation, a corporation, Jane Doe 
One, Jane Doe Two, and John Roe Corporation, a 
corporation, as Trustee, claim some right, title or 
interest in or to said sum of $100.00 per month so 
assigned by Homer Laughlin to this plaintiff from 
the tenant in possession of the Ground Floor of 
the Laughlin Building. 

Wherefore, Plaintiff prays that she may have a 
judgment declaring that on or about the 26th day 
of August, 1921, Homer Laughlin, also known as 
Homer Laughlin, Jr., assigned to this plaintiff 
$100.00 per month during the remainder of her 
natural life from the rentals due from the tenant 
in possession of the Ground Floor of the Laughlin 
Building, and that it be further decreed that the 
defendant Grand Central Public Market, Inc., be 
compelled to pay to this plaintiff the sum of $100.00 
per month during her natural life as long as it re- 
mains in possession of the Ground Floor of the 



Com. of Internal l!< vemu 45 

Laughlin Building, and that it be further decreed 
that the defendants Beach D. Lyon and Beach D. 
Lyon as Administrator with the Will Annexed of 
the Estate of Homer Laughlin, Deceased, and Citi- 
zens National Trust and Savings Bank of Los An- 
geles, a national banking association, as Trustee, 
have no right, title or interest in or to said sum 
of $100.00 per month so assigned to this plaintiff, 
and for her costs of suit [45] incurred herein and 
for such other and further relief as the Court may 
deem just and equitable. 

SALISBURY & ROBINSON 

By W. B. DENNIS 

'Attorneys for Plaintiff 

[Verification by Ella West] [46] 



46 Estate of Homer Laughlm, vs. 

EXHIBIT D 

In the Superior Court of the State of California, 
in and for the County of Los Angeles 

No. 356776 

ELLA WEST, 

Plaintiff, 

vs. 

BEACH D. LYON, BEACH D. LYON as Ad- 
ministrator with the Will Annexed of the 
Estate of Homer Laughlin, Deceased, GRAND 
CENTRAL PUBLIC MARKET, INC., a 
California Corporation, JOHN DOE ONE, 
JOHN DOE TWO, CITIZENS NATIONAL 
TRUST AND SAVINGS BANK OF LOS 
ANGELES, a national banking association, as 
Trustee, JOHN CORPORATION, a corpora- 
tion, JANE DOE ONE, JANE DOE TWO, 
JOHN ROE CORPORATION, a corporation, 
as Trustee, 

Defendants. 

ANSWER OF DEFENDANT BEACH D. LYON, 
AND BEACH D. LYON AS ADMINISTRA- 
TOR WITH THE WILL ANNEXED OF 
THE ESTATE OF HOMER LAUGHLIN, 
DECEASED. 

Comes now the defendant Beach D. Lyon, and 
Beach D. Lyon as Administrator with the Will 



Com. of Internal Revenue 47 

Annexed of the Estate of Homer Laughlin, De- 
ceased, and answering the complaint herein, admits, 
denies and alleges as follows: 

I. 

This defendant admits the truth of the allega- 
tions contained in Paragraphs I, II, III, IV and V 

of said complaint. 

II. 

This defendant alleges that no claim has been 
presented by the plaintiff as a creditor of said 
estate, and the time for presenting [47] claims has 
not expired and will not expire until on or about 
August 6, 1933. 

III. 

That various creditors have presented claims 
against said estate aggregating a large amount, and 
one of said claims is a preferred claim in a Large 
sum, and has priority over claims of ordinary 
creditors. 

That this defendant, as administrator with the 
will annexed of said estate, cannot pay any of said 
claims until an order of the Superior Court of the 
State of California, in and for the County of Los 
Angeles, having jurisdiction of said estate, shall, 
in the due course of administration of said estate, 
determine the priority of said claims and the pro- 
portions or amounts to which the creditors may be 



48 Estate of Homer Laughlin, vs. 

entitled, and authorize this administrator to make 
payments in accordance with such order that may 
be so given. 

Wherefore, this defendant prays that no costs be 
recovered by plaintiff against this defendant, either 
personally or as administrator with the will annexed 
of the Estate of Homer Laughlin, Deceased, and 
that the controversy existing between plaintiff and 
defendant may be determined by decree of this 
Court. 

RUSS AVERY 

Attorney for Defendant Beach D. Lyon, Individ- 
ually, and Beach D. Lyon, as Administrator 
with the Will Annexed of the Estate of Homer 
Laughlin, Deceased. 

[Verification by Beach D. Lyon.] [48] 



Com. of Internal Ttevenm 49 

EXHIBIT E 

In the Superior Court of the State of California 

in and for the County of Los AngeL - 

No. 356,776 

ELLA WEST, 

Plaintiff, 

vs. 

BEACH D. LYON, BEACH D. LYON, as Ad- 
ministrator with the Will annexed of the estate 
of Homer Laughlin, deceased, et al., 

Defendants. 

JUDGMENT 

This cause came on regularly for trial on the 
26th day of May, 1933, in Department 17 of the 
above entitled Court, Salisbury & Robinson, by 
W. B. Dennis, Esq., appearing as counsel for the 
plaintiff, and Russ Avery, Esq., appearing as coun- 
sel for the defendants, Beach D. Lyon, and Beach 
D. Lyon as Administrator with the Will annexed 
of the estate of Homer Laughlin, before the Court 
sitting without a jury, and it appearing that the 
defendants admitted all of the facts set forth in 
plaintiff's complaint, the cause was argued by coun- 
sel for the respective parties, and after due delib- 
eration thereon the Court ordered that judgment 
be entered accordingly in favor of the plaintiff, 
Ella West. 



50 Estate of Homer Laughlin, vs. 

Whereupon, the defendants waived notice of 
written findings of fact and conclusions of law. [49] 

Now, Therefore, by Virtue of the Premises It 
Is Hereby Ordered, Adjudged, and Decreed that 
on the 1st day of August, 1921, Homer Laughlin 
assigned to the plaintiff Ella West One Hundred 
($100) Dollars of the monthly rental due or to 
become due from the lessee of the ground floor of 
the Laughlin Building, which sum was to be paid 
to the plaintiff Ella West each month during the 
remainder of her natural life; that from and after 
said 1st day of August, 1921, Homer Laughlin had 
no right, title, or interest in and to said sum of 
One Hundred ($100) Dollars so assigned to this 
plaintiff; that the defendants Beach D. Lyon, and 
Beach D. Lyon as Administrator with the Will 
annexed of the estate of Homer Laughlin, have no 
right, title, or interest in and to the said sum of 
One Hundred ($100) Dollars of the monthly rental 
due or to become due from the lessee of the ground 
floor of the Laughlin Building, which sum of One 
Hundred ($100) Dollars was to be paid to the 
plaintiff, Ella West, each month during the re- 
mainder of her natural life, and which sum was 
assigned by Homer Laughlin to plaintiff. 

Dated this 28th day of June, 1933. 

LEONARD SLOSSOM 

Judge of the Superior Court. 



Com. of Internal Revenue 51 

EXHIBIT El 

In the Superior Court of the State of California 

in and for the County of Los Angeles 

No. 356,776 

ELLA WEST, 

Plaintiff, 

vs. 

BEACH D. LYON, BEACH D. LYON, as Ad- 
ministrator with the Will Annexed of the 
Estate of Homer Laughlin, Deceased, Grand 
Central Public Market, Inc., a California cor- 
poration, Citizens National Trust and Savings 
Bank of Los Angeles, a national banking asso- 
ciation, as Trustee, et al., 

Defendants. 

JUDGMENT 

It appearing from the records that the defend- 
ants Grand Central Public Market, Inc., a Cali- 
fornia corporation, and Citizens National Trust and 
Savings Bank of Los Angeles, a national banking 
association, as Trustee, were duly served with a 
copy of the Summons and Complaint in the above 
entitled action, and having failed to appear or plead 
in this cause within the time allowed by law, and 
the default of said defendants, Grand Central Pub- 
lic Market, Inc., a California corporation, and ( 1 iti- 
zens National Trust and Savings Bank of Los An- 
geles, a National banking association, as Trustee, 
having been duly and regularly entered, the above 



52 Estate of Homer Lauglilin, vs. 

entitled action came on for hearing on the 7th day 
of July, 1933, at the hour of 2:00 o'clock p.m., be- 
fore the Court, sitting without a jury, plaintiff ap- 
pearing by the firm of Salisbury & Robinson, her 
attorneys, and no one appearing for the defend- 
ants; and the testimony of witnesses and documen- 
tary evidence having been offered on the part of 
the plaintiff, and the Court having entered judg- 
ment in favor of the plaintiff and against the 
defendants, Grand Central Public Market, Inc., a 
California corporation, and Citizens National Trust 
and [51] Savings Bank of Los Angeles, a national 
banking association, as Trustee; 

Now, Therefore, by virtue of the premises afore- 
said and the law, 

It Is Ordered, Adjudged and Decreed that on 
the 1st day of August, 1921, Homer Lauglilin for 
valuable consideration assigned to the plaintiff 
herein, Ella West, for the remainder of her natural 
life, the sum of $100.00 per month, said sum to be 
paid from the rent due from the tenant in posses- 
sion of the ground floor of the Lauglilin Building; 

And It Is Further Ordered, Adjudged and De- 
creed that defendant Grand Central Public Market, 
Inc., be and it is hereby ordered and authorized to 
pay to this plaintiff the sum of $100.00 per month 
during the natural life of said plaintiff so long as 
said Grand Central Public Market, Inc., remains in 
possession of the ground floor of the Laughlin 
Building, or so long as it is obligated on any lease 
of the ground floor of the Lauglilin Building. 

And It Is Further Ordered, Adjudged and De- 
creed that the defendant Citizens National Trust 



Com. of Internal Revemu 53 

and Savings Hank of Los Angeles, a national bank- 
ing association, as Trustee, and the defendant 
Grand Central Public Market, Inc., a corporation, 

have no right, title or interest in or to said sum of 
$100.00 per month so assigned by Homer Laughlin 
to Ella West. 

And It Is Further Ordered, Adjudged and De- 
creed that the defendant Citizens National Trust 
and Savings Bank of Los Angeles, a national bank- 
ing association, as Trustee, be and it is hereby 
ordered to pay over to plaintiff any and all sums 
of money collected by said Bank from the tenant 
in possession of the ground floor of the Laughlin 
Building which were so assigned to this plaintiff. 

Dated this 7th day of July, 1933. 

/s/ MARSHALL P. McCOMB 

Judge of the Superior Court. 



EXHIBIT F 

AGREEMENT HOMER LAUGHLIN and 
ADA EDWARDS LAUGHLIN 

[Stamped] : Received for record Jan. 21, 1925, 
10 a.m. Received of Homer Laughlin. Copied in 
Book 625 of Deeds, Page 462, Records of Riverside 
County, California, P. E. Dinomore, Recorder. Fee 
$4.00 — 36. Compared J. W. Keterick, Reimer, 
Deputy. 

[Pencil notation]: Return to Homer Laughlin, 
602 Homer Laughlin Bldg., Los Angeles, Cal. 

This Agreement made and entered into this 1st 



54 Estate of Homer Lauglilin, vs. 

day of April, 1924, by, and between Homer Laughlin, 
the party of the first part, and Ada Edwards Laugh- 
lin, his wife, party of the second part, both of the 
City of Los Angeles, California, 

Witnesseth : 

Whereas, the parties to this agreement have been 
living separate and apart since on or about the 25th 
day of February, 1923, and desire to settle their 
property rights by this agreement, and it being 
their purpose by said agreement to determine all 
the rights of property existing between themselves, 
and to define the terms and conditions upon which 
each releases all right, title, interest and claim in, to 
or against property of the other, whether such 
property now exists or may hereafter be acquired ; 

Now Therefore, it is agreed by and between the 
parties hereto as follows: 

1. The party of the first part covenants and 
agrees to pay to the party of the second part for her 
support and maintenance the sum of Eight Hundred 
Dollars ($800) per month during the term of her 
natural life; provided, however, that if the parties 
hereto should be divorced at any time in the future, 
and in such event the party of the second part 
should remarry, said monthly payments shall be 
reduced to the sum of Three Hundred Dollars 
($300) per month. The said payments shall be 
made in cash, lawful money of the United States, 
beginning on the first day of May, 1924, and shall 
be made each month thereafter at the city of Los 
Angeles, California, on or before the 15th day of 
each succeeding month. 



Corn, of Internal Revenut 55 

2. The party of the first part agrees also to 
transfer all his right, title and interest in and to 
that certain Steams-Knight Brougham automobile 
heretofore purchased by the party of the Ersl pari 
for the party of the second part, and now in the 
possession of the party of the second part, and that 
he will pay or cause to be paid the entire purchase 
price for the said automobile, so that the title, free 
and clear of all encumbrances, may be vested in the 
party of the second part, as her separate property. 

3. The party of the first part covenants and 
agrees to immediately execute and deliver to the 
party of the second part a quit-claim deed, quit- 
claiming to the second party, as her separate estate, 
all his right, title [54] and interest in and to the 
residence property located at No. 666 West Twenty- 
eighth Street in the city of Los Angeles, state of 
California, and more particularly described as fol- 
lows, to-wit: 

The southeasterly 39 feet of lot 30, all of lot 
31 and the northwesterly 5 feet of lot 32, all 
in block "B" of the Wheeler Tract, as per map 
record in Book 10 at page 25 of Miscellaneous 
Records of said Los Angeles County. 

The party of the first part further covenants and 
agrees to pay, or cause to be paid, on or before 
maturity, that certain promissory note for the sum 
of Eighteen Thousand Dollars, executed by the par- 
ties hereto, in favor of Flora Griffin, and secured 
by a mortgage on the last described property, which 
mortgage is recorded in Book 254 at Page 106 of 



56 Estate of Homer Langhlin, vs. 

Official Records, records of Los Angeles County, 
and to fully discharge and satisfy said mortgage; 
and until the satisfaction of said mortgage, the 
party of the first part covenants and agrees to pay 
all interest when and as it becomes due upon said 
last named indebtedness, and to prevent any fore- 
closure of said mortgage ; and he further covenants 
and agrees that until the satisfaction of said mort- 
gage he will pay all of the taxes levied upon said 
last named property and all fire insurance on said 
premises, but when said mortgage shall have been 
fully satisfied of record, his obligation to pay said 
taxes and insurance shall thereupon cease. 

4. All of the furniture, paintings, bric-a-brac, 
books, gardening tools, ornaments, automobile sup- 
plies, and other articles of personal property now 
in or about the residence and surrounding premises 
of the second party at No. 666 West Twenty-eighth 
Street, Los Angeles, California, excepting the Chi- 
nese porcelains and all other works of art purchased 
in the Orient, shall be and remain the property of 
the second part, excepting also the following articles 
which shall be and remain the property of the first 
party, viz. : 

Paintings : 

1 Norini (Subject) 

1 Wachtel (Subject) 

1 Wachtel (Subject) 

1 portrait of the father and mother of first 

party; 
The jewelry of the first party; 



Com. of Internal Uevemu 57 

i table lain}) standard, formerly in the resi- 
dence of the father of the first party; 

The technical books of the first party; 

1 brass sun dial ; 

Books containing the messages of the Presi- 
dents of the United States. [55] 

As to the Chinese porcelains and said works of art 
purchased in the Orient, each party shall first choose 
one of said porcelains or works of art, the first 
choice to be determined by lot; thereafter the first 
party shall choose two, then the second party shall 
choose one, and so on, the first party choosing two 
and the second party one, until they are all chosen. 
Those chosen by each party shall be and remain his 
her separate property. Each party agrees to 
immediately execute and deliver to the other a bill 
of sale for his or her respective personal property 
as above designated, or, as to the Chinese porcelains 
and the said works of art, as they may be chosen. 
The party of the first part agrees to transfer to the 
second party all unexpired policies of insurance on 
said property designated as hers or to be hers, also 
on said Stearns-Knight Brougham, in such manner 
that in case of the happening of fire or other peril 
insured against, the benefits of said policies will 
accrue to the second party. 

5. In consideration of the performance of all the 
terms and conditions of this agreement by the party 
of the first part, and especially the payment of said 
monthly sum of $800.00, the party of the second 
part covenants and agrees that she will hold the 



58 Estate of Homer Laughlin, vs. 

first party free and clear of any and all liabilities 
for debts or obligations incurred by her from and 
after the date hereof, and will pay all bills and in- 
debtedness which may be incurred by her since said 
25th day of February, 1923, of all kinds and de- 
scription, except the following, which the party of 
the first part agrees to pay, viz. : The sum of $150.00, 
balance due on membership in the Women's Athletic 
Club, and $100.00 due for dentistry to Dr. E. E. 
Kirtlan; also the sum of $1,500.00 to Overton, Ly- 
man & Plumb on account of their legal services to 
the second party in connection with the effecting of 
this property settlement. 

6. The party of the first part hereby remises, 
releases and relinquishes and forever quitclaims to 
the said party of the second part, all right, title and 
interest which he has or might claim in and to all 
of the property, real and personal, held or owned by 
her, or in which she may have any interest, vested or 
contingent, and wheresoever situated, and all such 
property, both real and personal, as she may here- 
after in any manner acquire, [56] and also re- 
nounces and releases any and all right to inherit 
any portion of her estate in case of her death, and 
any right to administer upon her estate in that 
event or to claim an allowance from her estate or a 
probate interest therein; also all right and claim of 
right to receive her earnings, if any, hereafter to 
accrue; and all right to support by her in any con- 
tingency under the provisions of Section 176 of the 
Civil Code of California, or any other law of this 
state or other state or country. 



Com. of Internal Revenue 59 

7. The said party of the second pari docs hereby 
release, remise and forever quit-claim unto the said 
party of the first part any and all right, title and 
interest which she has or might or could claim or 
assert as his wife, or otherwise, in and to all or ai 
of his property, real or personal, held or owned by 
him or in which he has any interest, either vested 
or contingent, and including all or any property 
he may hereafter in any manner acquire, and where- 
soever situated, and whether the same be separate 
or community property, and including also the earn- 
ings and income of the said party of the first part 
now accrued or hereafter to accrue to him, except 
the rights and interests reserved and expressly pro- 
vided for by the terms and conditions of this con- 
tract, which rights are hereby expressly reserved; 
and the said party of the second part does also re- 
linquish and release to the party of the first part 
any and all rights and claims which she has or might 
or could assert to support and maintenance or ali- 
monv of anv nature, and for any time, whether in 
the course of judicial proceedings between the said 
parties, or otherwise, including the items of attor- 
neys' fees and costs in any such judicial proceeding; 
and she renounces, quit-claims and relinquishes all 
rights which she has, or could assert against the 
party of the first part for support as his wife, other 
than or in addition to the payments to be made to 
her by him, as above provided, and the property 
to be conveyed by him to or for her, as above pro- 
vided. The party of the second part also releases, 
renounces and relinquishes all right and claim 



60 Estate of Homer Laughlin, vs. 

which she has or might have to any share in the 
tate of the said party of the first part in case of 
his decease, and to inherit from him in the sta 

California, or elsewhere, including her com- 
munity pi ty rights, if any. and the right to 
dower in any property of the said party of the first 
part: and also renounces and relinquishes all right 
to administer upon his estate in case of his death, 
and her right to an allowance from his estate of any 
kind or nature whatsoever, excepting the payments 
and the pr< y rights herein provided for. 

x . The parties hereto mutually agree that each 
of them, respectively, will execute all such deeds. 
assignments, transfers, documents - r instruments 
as may he presented to him or her by the other and 
which may hi- reasonably necessary or convenient 
enable either of them to alienate, transfer, mor _ § ■ 
►thecate his or her property, respectively, in 
accordance with the terms and conditions of thus 

jreement; provided, however, that nothing in this 
paragraph shall he construed as obligating the party 
of the second part to execute any document or in- 
strument which may have the effect of depriving 
her of any rights or property which by this agree- 
ment she is entitled t<>: provided, further, that 
neither of the parties hereto shall be required by 
the other to sign any instrument not provided for 
in this contract which will in any manner render 
the one so required to sign liable for the payment 
of any money or the performance of any act. or the 
incurring of any liability in the nature of a war- 
ranty, or otherwise. 



Com. of Internal Revenue 61 

9. In order to secure the faithful performance 
of the terms and conditions of this agreement, the 
party of the first part covenants and agrees th 
that certain real estate, together with the improve- 
ments thereon, known as the "Homer Laughlin 
Building/' located between Third and Fourth 
Streets, on the west side of Broadway, in the city 
of Los Angeles, state of California, shall be and is 
hereby hypothecated as security for the faithful 
performance of all of the terms and conditions of 
this agreement, and especially for the payment of 
the said monthly installments of $800 each, and of 
the mortgage lien now existing upon the residence 
located at No. 666 West 28th Street above de- 
scribed, which said Homer Laughlin Building is 
more particularly described as follows, to-wit: [58] 

Lots "A" and "B" of Homer Laughlin Sub- 
division of Block Eight (8), Ord's Survey, in 
the city of Los Angeles, county of Los Angeles, 
state of California, as per map thereof re- 
corded in Book 83 at Page 41 of Miscellaneous 
Records in the office of the County Recorder of 
said county. 

And the said party of the first part covenants and 
agrees that if at any time while this contract is in 
force he shall sell the said Homer Laughlin Build- 
ing, he will, coincident with said sale, deposit with a 
trust company, mutually satisfactory to the parti, - 
to this agreement, doing business in the city of L< - 
Angeles, California, the sum of One Hundred Fifty 
Thousand Dollars ($150,000) which shall be in- 
vested in securities mutually satisfactory to the 



62 Estate of Homer Laughlin, vs. 

parties to this agreement, which trust fund shall 
stand as security for the faithful performance of 
all the terms and conditions of this agreement in 
lieu of the said Homer Laughlin Building ; the said 
trust fund and the income therefrom to be subject 
to the disposition of the party of the first part, pro- 
vided he is not in default under the terms hereof, 
subject, however, to the right of the party of the 
second part to have said trust fund at all times to 
remain intact and of the actual market value of the 
sum of $150,000.00, as security for the faithful per- 
formance of the terms and conditions of this agree- 
ment by the party of the first part to be done and 
performed; and the said party of the first part 
•covenants and agrees at all times during the exist- 
ence of this agreement to keep said trust fund of 
the actual market value of the sum of $150,000 for 
the purposes herein stated. The said trust shall 
provide that should the party of the first part be in 
default at any time or times in the payment or pay- 
ments to be made to the second party under the 
terms hereof, the trustee of said fund shall immedi- 
ately upon such default, pay out of the interest of 
the said trust fund, if the interest is sufficient, but 
if not, then out of the principal thereof, such sum 
as may be necessary to cure said default, or defaults, 
it begin the intention of the parties hereto that said 
trust shall be so created that the party of the second 
part shall always be assured of receiving the monthly 
payments herein provided for. If, without the sale 
of the said Homer Laughlin Building property, the 
party of the first part shall, at any time, create a 
trust fund of $150,000.00, in cash, or shall deposit 



Coyyi. of Internal Revenm 63 

approved securities with said trustee, of the actual 
market value of $150,000.00, and thereby create a 
trust upon the same terms and conditions as above 
set forth, or shall furnish to the party of the [59] 
second part an insurance policy, issued by a respon- 
sible corporation mutually satisfactory to the parties 
to this agreement, guaranteeing the performance of 
the terms of this agreement by the party of the first 
part, the party of the second part covenants and 
agrees to release the said Homer Laugh] in Build- 
ing property from the lien or obligation of this 
contract. 

10. It is understood and agreed by and between 
the parties hereto that the said Homer Laughlin 
Building is now subject to a first mortgage to secure 
an indebtedness of $600,000.00 in favor of the Met- 
ropolitan Life Insurance Company, and the hypo- 
thecation of said building as security for the faith- 
ful performance of the terms and conditions of this 
agreement is subject to said prior indebtedness. 

It is further covenanted and agreed by and be- 
tween the parties hereto that if it becomes necessary 
at any time during the existence of this agreement 
to increase the indebtedness upon the said Homer 
Laughlin Building property, the said prior in- 
debtedness may be increased to a sum not to exceed 
an aggregate of $650,000.00, and the party of the 
second part covenants and agrees that if the party 
of the first part should desire to increase said prior 
indebtedness to a sum not to exceed the said amount 
of $650,000.00, she consents that he may do so, 
hereby consenting thereto, and will execute and 



64 Estate of Homer Laughlin, vs. 

deliver to the party of the first part or to any person 
or corporation named by him, any document neces- 
sary or proper in order to consent to the increase of 
said prior indebtedness upon the said Homer Laugh- 
lin Building property to an amount not exceeding 
at any one time the sum of $650,000.00, and bearing 
interest at a rate not to exceed seven per cent per 
annum. 

It is covenanted and agreed by and between the 
parties hereto that if a divorce should be granted 
upon the complaint of either party to this agree- 
ment, and thereafter the party of the second part 
should marry some person other than the party of 
the first part, the obligation herein contained to pay 
to her the monthly installment of $800.00 during 
the term of her natural life shall immediately ter- 
minate as to $500.00 thereof, and upon such con- 
tingency, but not otherwise, the party of the second 
part covenants and agrees to release the party of 
the first part from all further obligations to make 
any monthly payment in excess of $300.00, and 
will [60] execute any and all documents that may 
be necessary to release any of the property of the 
party of the first part, and especially the Homer 
Laughlin Building property from the lien created 
by this agreement, to secure the faithful perform- 
ance of the terms and conditions thereof by the 
party of the first part ; it being particularly under- 
stood that the monthly payments of $300.00 per 
month, after the remarriage of the said second 
party, shall not be secured by any lien on the prop- 
erty of the first party, but shall remain only a per- 
sonal obligation as to said $300 per month. The 



Com. of Internal R< v( nue 65 

payments herein provided to be made by the party 
of the first part to the party of the second part 
shall survive the death of the party of the firs! pari 
and shall be binding upon his estate. 

11. In the event a divorce should be granted to 
either party to this agreement, it is stipulated and 
agreed that the terms of this contract may he, at the 
« ption of either party, included in any interlocutory 
or final decree that may be entered in such action, if 
any such action is commenced or prosecuted. 

In Witness Whereof the parties hereto have exe- 
cuted this agreement, in duplicate, the day and year 
first above written. 

/s/ HOMER LAUGHLIN, 

Party of the First Part. 

/s/ ADA EDWARDS LAUGHLIN, 
Party of the Second Part. 

State of California, 
County of Los Angeles — ss. 

On the 20th day of January in the year 1925 be- 
fore me, J. C. Laderize, a Notary Public in and for 
said County, residing therein, duly commissioned 
and sworn, personally appeared Homer Laughlin, 
personally known to me as the person whose name 
is subscribed to the within instrument, and acknowl- 
edged to me that he executed the same. In witne 
whereof I have hereunto set my hand and affixed 
my official seal the day and year in this certificate 
above written. 

J. C. LEDERIZE. 



66 Estate of Homer Laughlin, vs. 

State of California, 
County of Los Angeles — ss. 

On this 8th day of April, 1924, before me, Jessie 
McDill, a Notary Public in and for said county and 
state, residing therein, duly commissioned and 
sworn, personally appeared Homer Laughlin, known 
to me to be the person w T hose name is subscribed to 
the foregoing agreement, and acknowledged to me 
that he executed the same. 

[Seal] JESSIE McDILL, 

Notary Public in and for the County of Los Ange- 
les, State of California. 

State of California, 
County of Los Angeles — ss. 

On this 10th day of April in the year one thou- 
sand, nine hundred and twenty-four, A.D., before 
me, John DePerie, a Notary Public in and for said 
County, residing therein, duly commissioned and 
sworn, personally appeared Ada Edwards Laughlin, 
personally known to me to be the person whose 
name is subscribed to the within instrument, and 
acknowledged to me that she executed the same. 

In Witness Whereof, I have hereunto set my 
hand and affixed my official seal the day and year in 
this certificate first above written. 

[Seal] /s/ JOHN DeFERIE, 

Notary Public in and for the County of Los Ange- 
les, State of California. 

My commission expires April 11, 1927. 



Com. of Internal Reven 67 

EXHIBIT G 

Ada E. Laughlin vs. Homer Laughlin 

D 28,768 

Filed 1924. April 15, 1924. 

Order of default May 9, 1924 

Interlocutory Judgment of Divorce, made Sep- 
tember 24, 1924, entered September 26, 1924: 
After preliminary recitals: 

"The Court finds that all of the allegati 
contained in the complaint are true, and thai 
divorce ought to be granted as prayed for in 
said complaint. That on the first of April, 
1924, plaintiff and defendant entered into a 
property settlement agreement, by the terms 
of which all property rights, and maintenance 
of the plaintiff were determined and agreed 
upon, 

"Wherefore, it is hereby Ordered, Adjudged 
and Decreed that the plaintiff is entitled to a 
divorce from the defendant ; that when one year 
shall have expired, after the entry of this in- 
terlocutory judgment, a final decree shall be 
entered, granting a divorce herein, wherein and 
wherebv the bonds of matrimonv heretofore 
existing between said plaintiff and said defend- 
ant shall be dissolved; 

"And it is further Ordered, Adjudged and 
Decreed that the said property settlement agree- 
ment be, and the same hereby is, ratified, ap- 



68 Estate of Homer Lauglilin, vs. 

proved and confirmed, and is hereby made a 
part of this decree by reference, and that the 
same shall be made a part of [63] and incor- 
porated in the final decree in this matter." 

Final Judgment of Divorce, made and entered 
September 29, 1925: 

After preliminary recitals as to interlocutory 
judgment entered September 26, 1924, and granting 
plaintiff a final judgment of divorce, the decree 
continues : 

"It is further ordered, adjudged and decreed 
that that certain property settlement agree- 
ment, referred to in the interlocutory decree in 
this action and by reference made a part 
thereof, is hereby ratified, approved and con- 
firmed, and the property of the parties hereto 
is hereby assigned in accordance with the terms 
of said agreement and the other rights and ob- 
ligations of the parties hereto are assigned, 
determined and adjudged in accordance with 
the terms of said agreement, which agreement 
is hereby made a part of this judgment and is 
in words and figures as follows: to- wit: 

[Here follows the April 1, 1924, agreement 
in full.]" [64] 



Com. of Internal Revenue 69 

EXHIBIT H 

Treasury Department, Washington 

MT-ET-6305-6th California. Estate of Homer 
Laughlin. Date of death — December 27, 1932 

Oct. 25, 1939 

Beach D. Lyon, Administrator, 
R602— 315 South Broadway, 
Los Angeles, California. 

Sir: 

Reference is made to your claim for refund of 
Federal estate tax in the amount of $2,500.00, filed 
on behalf of the estate of Homer Laughlin, Jr., on 
October 22, 1938. 

This claim is based upon the contention that the 
estate is entitled to additional deductions for attor- 
ney's fees, miscellaneous administration expenses 
and debts of decedent, as set forth in the statement 
attached to the claim for refund. 

Consideration has been given to the claim and on 
the basis of the evidence now of record the follow- 
ing statement is submitted: 

DEDUCTIONS 

Returned Determined Adjusted 

Attorney's fees $12,026.36 $ 11,152.59 $18,027.48 

Miscellaneous adminis- 
tration expenses 23.55 790.55 1,065.66 

Debts of decedent (in- 
come tax and inter- 
est, 1931 and 1932) 259,899.31 168,430.10 77,045.88 



70 Estate of Homer Lauglilin, vs. 

Attorney's fees are deducted in the amount which 
it apears has been paid and will he paid for services 
rendered in the administration of the estate. 

Miscellaneous administration expenses are de- 
ducted in the amount which the evidence now of 
record indicates is a proper deduction under this 
heading. 

Deduction is made for debts of decedent in the 
amount which [65] it appears was the personal obli- 
gation of the decedent on the date of his death, 
including $1,659.47 for additional Federal income 
taxes for the years 1931 and 1932 and excluding 
$101,259.35 representing decedent's liability in a 
separation agreement with his wife which was 
erroneously included as a deduction in the prior 
determination of the tax liability of the estate. This 
amount is not a proper deduction under section 
812(b)(5) Internal Revenue Code. See also Lewis 
v. Reynolds, 51 Supreme Court 145; Roby-Somers 
Coal Company v. Routzan, 100 Fed. (2d) 228; Wil- 
liam T. Fitzpatrick estate, 39 B.T.A. 162; Eben 
Phillips estate, 36 B.T.A. 752 ; Empire Trust Com- 
pany v. Commissioner, 94 Fed. (2d) 307, affirming 
35 B.T.A. 866. 

The following summary is submitted: 



Com, of Internal Revenue 71 

Gross estate $1,011,440.^1 

Deductions, 1926 Act 851,306.71 

Net estate, 1926 Act 160,134.10 

Net estate, 1932 Act 210,134.10 

Gross tax, 1926 Act $ 3,304.02 

Credit for estate or inheritance taxes 2,643.22 

Net tax, 1926 Act 660.80 

Total gross taxes, 1926 and 1932 

Acts 15,114.75 

Gross tax, 1926 Act 3,304.02 

Additional tax 11,810.73 

Total net tax 12,471.53 

Amount assessed pursuant to waiver 6,516.59 

Deficiency $ 5,954.94 

You will observe that the audit review of the 
return results in a deficiency of $5,954.94 instead of 
a refund of $2,500.00, indicated in the claim. 

In view of the foregoing, your claim for refund 
of Federal estate tax in the amount of $2,500.00 is 
rejected in its entirety. 

Respectfully, 

GUY T. HELVERING, 

Commissioner. 

By: /s/ D. S. BLISS, 

Deputy Commissioner. [66] 



Form 1041 



( 



UNITED STATES 



( 



Pm*i 

1942 



FIDUCIARY INCOME TAX RETURN 



<« 




(FOR ESTATES AND TRUSTS) 
For Calendar Year 1942 

or feai year bcgitnag _ 1942, ami ending , 1943 



File tiki, return Mt Uter thui the ISth day •< the third Moth UUro* the cWm W the 
tauautle r«ir. 

(feint names and address plainly selow) 
NumoI 
Estate or Trust . J5.5TAT.E.flJF..ja0.1CBa.i^U.aHU 



Name and 
Address of 

Fiduciary 



fV)4 ffnrrmr T^ghTi n Thitl/Hng 



(P. N» Uee TW >■<■) 


File Code 




SeritJNo 


Dwtnct 



(CuImt'i Stan) 



Cuh 



Check 



MO. 



FIR5T PAYMENT 









ln1T»cti— N«. 



INCOME 

1. Dividend* 

2. Interest on bank deposits, notes, etc. 

5 Interest on corporation bonds, etc., (except ioterat i« be 

reported in item 4) $ 

4 . Interest on tax-free covenant bonds upon which a Federal 

t tax was paid at source $. 

5.. Interest on Government obligations, etc: 
(a) From lines (e), (/), and <j\ 

column 3 (a), Schedule B.„. 



Lew MKTUublc 






5 - -1 



(•) From line (A) Schedule B _ $ 



fc. 



.JEK99&M 



(c) From line (/) Schedule B ... $ $ 

Income (or loss) from partnerships, syndicates, pools, etc., and income from other fiduciaries 

(Sum ud uUm) - 

7 Rents and royalties (t™. Schedule o 

8. {a) Net gain (or loss) from sale or exchange of capital assets (tv™. Schedule El) 

(b) Net gain (or loss) from sale or exchange of property other than capital assets (he*. Schedule F\ 

9. Net profit (or loss) from trade or business (>itech •uunent) 

1 0. Other income (rt*i« «tur» oi mc«n.> ScXLedulji.AttACn^d 

11. Total UKOme m items I tO 1 0(enlernonlAMbk mcome in Schedule. Bend H). i 11 'j . fa^ 7-^t". 

DEDUCTIONS 

12. Interest («*■«■ . ScheeWt G) 

I 3. Taxes (repWmea Schedule C) 




.5 1 *. 6.61. 6 5 



14. Other deductions authorized by law (npUu. u, 

15. Total deductions in items 12 to 14 . 

16. Balance (item II minus item 15) 



G). 



2. 



1.2ZJSQJ. 



17. Less amount distributable to beneficiaries (item 5 (a), above, plus total of column 2, Schedule A). 

18. Net income (taxable to fiduciary) (item 16 minus item 17). 



&i.l3^ 



$ 353131 



$ 5^471-51 



COMPUTATION OF TAX 



19. Net income (item 18 above)..'. % 55^7-1 L-51 

20. Less: Personal exemption _. fiO O LO Q 

21. Balaiic* (surtax istt income).. $ ^^\\SL 

VL Less: Interest on Government obliga- 
tions, etc (item 5 (»), above; 

23. Balance subject to normal tax — 

24. Normal tax (6% of item 23) 

25. Surtax oaitesm 2 1___ 



26. Total (km 24 plus item 25) 




27. Total tax (item 26 or line 14, Schedule E) . 

28, Leas: Fiduciary's share of income tax paid 

at source „ 

Fiduciary's share of income tax paid 
l» a foreign country or Ui 
State pnimiiw (Attach F« 
1116). 



29. 



^a*tB.fa. 



$ 29^.819 Jlfll 



— l 



items 28 mi 29). .Wt2$.A19 



A 



Page 2 

Schedule A.— BENEFICIARIES' SHARES OF INCOME AND CREDITS. (Include •• beneficiaries person* to whom amount* 
were paid or set a*id« for religious, charitable, etc., purpose*.) (See Instruction* S and 17) 



Name »nrl ..Wr»« of el 
(De*ajnalc nonreudent alien*) 



(«)- 

(d) 

(«) 



1 Taxable ncoraf exclusive 
of interest on Covcrnracnt 
oWvi«« oubrni to «ur- 
tax only. iad drtidendi to 
be reported in column 9 



1 Federal income tu paid 
•I witt (2^5 of .rea* 
•mount in item 4. put I. 
n>w lira S. pa§* I) 



4. Income end pro*** tu 
paid to e foreaxa country i 
Lrutr J btate* pnmeeioa 



Total of beneficiaries' shares.. „. $ 



CONTINUATION OF SCHEDULE A.— BENEFICIARIES' SHARES OF INCOME AND CREDITS 



6 * holly tax-exempt obliaatione (*harex of 
. ., the .urn ol line. (a). (.0. (c). end (*0 of 
-iter corre- bcnodule B) 
■paeding to above 
to aSenlify benefi- 










Partially tax-exempt 










7 l 'nited States S*vin§t Bonds and Treasury 
Bonds (shares ol line (r). columns 2 and 3«. 
Schedule B) 


8. Oblix;*tions of cerlttn initrumentelitiet of 
the I 'nited Statei («riare* of line (/). column* 
2 and 3a. Schedule B) 


9. Dividends on share ac- 
counts oi Federal stv. 


ciary 

a Principal b Interest 


ft. Principal 


h Intern! lee* 

amortizaLle bond 

premium 


a. Principal 


b Interest le»» 

amort izable bond 

premium 


Uons (shares of line (j) 
column 3 (a). Schedule 

B) 





$ 


J 




$-~ 





$ 




» 




$ 










































































• 




















Tot.ls $ 


I 


$ 




$ 




$ - 




$ 




$ 





.Schedule B— INTEREST ON GOVERNMENT OBLIGATIONS, ETC. (See Instruction 5) 



1. Obliaatione or •ecuritie* 


2. Amount owned *t 
end of year 


3. Intereit (and dividendt eubject to surtax 
only) received or *cc rued during the year 


| 5. Fiduciary'. 

4. Kk) i. i«ry'« ol interest on 

•hare ol interval amount in caeca* of 

exempt from | exemption, and div- 

tuauon i'lend» rubject to 

B only 




$- 




.. Bencficiariei' »harei b. Fiduciary'* •hart 


All xxxxzz 




(a) Obligation* of a State. Territory, or political subdivision thereof. 


$ 


$.._ 






(t) Obligations issued prior to March 1, 1941. under Federal Farm 
Loan Act. or under auch Act a* amended 












(r) Obligations of United States issued on or before September 1, 
1917.... _ 














All 


X X X X X I 

X z z z z z 




(</) Treasury Notes issued prior to December 1, 1940, Treasury 
Bills and Treasury Certificates oi Indebtedness issued prior 
to March 1. 1941 















All.. 


Z 1 


(e) United States Savings Bonds and Treasury Bonds issued prior 
to March 1. 1941 














$ 




(.0 Obligations oi instrumentalities oi the United States (other than 
obturations to be reported in (k) above) issued pmr to March 
1. 1941 














None 






(j) Dividends on share accounts in Federal savings and loan associa- 
tions in case of shares issued prior to March 28. 194 J 


Z S I X X I 


XX 










I I I z z s X 







(A) 



Total (include in item 5 (p). page I) 



(/) Treasury Notes issued on or after December I. 1940, and obligations issued on or after March I. 1941. by 
the United States or any agency or Instrumentality thereof (enter amount of interest as item 5 (c). page I ) 



of year 



Inter* 

crued during the year 
(•ubxKt to 
• nd turtax) 



Schedule C— INCOME FROM RENTS AND ROYALTIES. (See ln«truction 7) 



1. Pvind oi property 



R t»nt*l a j frca A&n&g.tft. of H rimer. . 
Lttaihllp luA ldlalat 4BP d Srajnd 

■rai. Public M&jfcej,. 
Lest assignment of rent tb 



Explanation oi deductions 



£12.. 21 ft, .23 



♦-.200- 



~i&ifilftl 



00 



2i 



1 Depreciation (explain 4. Repair, (explain be 

D) low) 







7.W 



5. Other expanee* (itam- 6. Nat profit (enter 
ae below) item 7. paae I) 



.51 9.Jl k>l 7 U . 1 i3,,J7,^Q2 



..ftt.93.6 



,0i 



laimed in columns, 4 and 5 Depreciation and other tchedulea attached,. 






Com. of Internal Bevenue 75 

SCHEDULE C 

Item 4 

Repairs 

Hardware, locks and glass $ 41.27 

Carpenter — Woodwork 123.63 

Plaster 81.57 

Painting 806.83 

Plumbing 317.16 

Roof and Skylights 278.10 

Miscellaneous 09.76 $ 1,748.32 



Grand Central Public Market— Repairs 8,012.42 



$ 9,760.74 



Item 10 
Other Income 

Service and Miscellaneous revenues building $ 82.00 

Grand Central Public Market 

Light and Power revenue $22,390.14 

Information Department Income 7,765.77 

Advertising 1,749.34 

Miscellaneous 1,693.71 

Water 3,380.02 

Garbage and Rubbish 5,364.82 

Storage Revenue 8,599.15 

Janitor Service revenue 3,636.10 54,579.05 

$ 54,661.05 



76 Estate of Homer Laughlin, vs. 

Item 13 

Taxes Paid 

Federal excise taxes $ 18.32 

Los Angeles City and County — real estate and per- 
sonal property 20,695.17 

Los Angeles City and County — solvent credits 21.47 

Riverside County — real estate 2.53 

San Bernardino County — real estate 3.20 

Federal unemployment taxes 178.86 

California State Unemployment taxes 603.90 

Federal Old Age benefit taxes 596.26 



22,119.71 
California State income tax 1942 4,285.72 



$ 26,405.43 



SCHEDULE 

Item 14 

Other Deductioi 

Contributions 

Little Sisters of the Poor 

Y.M.C.A 


G 

IS 

$ 


15.00 
50.00 


Los Angeles Community Chest 


425.00 


7th Day Adventist Church 


20.00 


Tuberculoses Assn 

L. A. Visiting Nurses Ass'n 


2.00 
10.00 


United China Relief 


10.00 


United Service Organizations 

Women's Ambulance Defense Corp. 


25.00 
20.00 


Ada Edwards Laughlin — Property 
agreement with Homer Laughlin — 
month for life 


settlement 
$800.00 per 



$ 577.00 



9,600.00 
$ 10,177.00 



Com. of Internal Revenue 77 

SCHEDULE C 

Item 5 

Other Expenses 

Management Expenses : 

Salaries — Office and Management.... $25,657.52 
Office stationery, supplies and ex- 
penses 393.65 $ 26,051.17 

Homer Laughlin Building Expense: 

Leasing expense $ 5.00 

Janitor Service 

Salaries $8,854.10 

Supplies 369.91 

Window cleaning 500.00 

Toilet supplies 319.90 10,043.91 

Electric Lighting 

Current 342.50 

Lamps 46.66 

Miscellaneous 11.69 400.85 



Heat and Ventilating 

Heat 1,512.00 

Gas 9.66 1,521.66 

Plumbing 

Water 299.20 

Hot Water 300.00 599.20 

Elevator Service 

Salaries 3,481.63 

Power 1,353.96 

Liability Insurance 129.96 

Inspection, repairs & 

Misc 513.81 5,479.36 

General Operating Expenses: 
Salaries— Watchmen .. 301.94 

Rubbish removal 96.00 

Directory board 28.22 

Compensation Insur- 
ance 168.96 



78 Estate of Homer Lauglilin, vs. 

SCHEDULE C (Continued) 

Item 5 — General Operating Expenses — (Continued) 
Water for Fire Hose $ 50.96 
Air Raid Protection... 178.51 

Miscellaneous 4.00 $ 828.59 



Alterations for tenants 67.07 

Miscellaneous service costs 1.86 

Street Lighting- assessment 103.18 

Insurance 633.88 

Legal and Auditing 5,286.84 

Dues and Subscriptions, etc 1,048.96 

Loss on bad accounts — tenants 360.00 26,380.36 

Grand Central Public Market Expense 

Office Salaries $ 4,144.89 

Office Supplies and expense 1,211.70 

Miscellaneous Administrative ex- 
pense 652.28 

Salaries and Wages 30,763.68 

Insurance 2,718.68 

Market Expenses, etc 4,507.87 

Janitor Service 2,995.01 

Water 3,743.88 

Garbage and Rubbish disposal 11,069.80 

Light and Power 12,559.39 

Bags and Information expense 5,287.81 

Advertising 1,287.50 80,942.4!) 

$133,374.02 



SCHEDULE D 

Grand Central Public Market 
, Fixtures, Equipment and Related Reserves 
Year Ended December 31, 1942 



Market Fist on-* and Equipment — Old 

■ I and 

3 Exhaust Fans — 2nd hand 

■j Neon Str,.-t signs- 2nd hand 

8 Blectrle Clocks— 2nd hand 

l>:inel switch -ttourd* 

Total—Old 



330.00 


« 132110 


$ 66.00 


$ 108.00 


300.00 


120.00 


« 


180.00 


175.00 


70.00 


35.00 


105.00 


26.00 


10 no 


6,00 


1500 


1,982.00 


786.40 


393.20 


1.170 00 



: 

I 
1 Bunks Vacuum Cleaner 



] I -■! Simpl< i Ti 



Track -i-i i-.- ■ 

■ i tt'.m I -. Trucks 

12 (Jar llri. Wurel -. Truck* 

N.» Elevator fiatcs installed 
r. ■..,■.„ Enclosure 

I.' i Llii-lnMII. 



■ In S|iiTi;il inl'llii" ■-.!. 

do Automatic gab ind fire do 

' .-in-.- 

1 Si. 



I'- 



T.iinl" Kale 

i. !■ ratol ihafl 

urr construcu 'I 






; -.ill;il|ii|i I. it liL't.l A I""' 

I'liih I. nil. . i. I I 

tnforn atioi i ii. 

. doors 

l 12 I I ' i ■ 

I I.., ..mi I ii- iiiimlnr lii-nter — K 
I Water Meters 
, Ladders 



(Info Dcskl 






.1,. 



ill I Mature* 

Doughnut Machine 

blankets 
Scrubbing machine A vacuum cleaner 

Attachment for scrubbing, machine 

Till. lis. 1'hiiir* iinil -mm,,- 



do 






Total Market I 

U : i , 

,,| 
.1 , 

i 1 1. 

i i i, 

■2nd hand. 




II, ,1, 

l.s.69 

41 .'.:) 
93.54 

Till HI 

702.96 

702 ~il 
350.00 
ISi 38 

12 1 14 

528.00 

71 50 
536.00 

92.60 
200,50 

24 :.l 
2.-.1 .85 

10.02 

7s 34 

42 04 
07457 

1 2: 

192.56 



l in 

:!.-. 00 
115.00 



triii 

75 110 

I,". Illl 

5.00 
13.00 



65 00 
3546 
21.10 
927.00 
382.00 
14.13 
807 SO 
8.75 



1 1 S3 

03 54 

-ii. 'it 

702 00 
702 54 
350.00 
158.38 

12.04 
528.00 

71.50 

Mi.. ,ii 

92.60 

206.50 
24.51 

251 -5 
10 02 
7-24 
42.94 

974.57 

l,2:ll,ii!i 
102 '.II 

20.00 

10.20 
65 20 
35 in 
21.10 
927.00 
382.00 
14.13 

MIT Ml 
B 75 
7(1 211 



9.69 


Mil 


1' ii 


21 B2 


18 71 


an 53 


18.98 


11 lis 


in :i, 


22250 


140 r.ii 


363.18 


190 00 


140 51 


339 57 


04,20 


36.00 


00,20 


2|i ill 


15.84 


41 ss 


2.20 


1,20 


3 40 


105.60 


52 80 


15S40 


11 75 


7 15 


20,90 


58.01 


53.60 


i 1 1 117 


10.03 


0.26 


19,20 


20.65 


20.65 


41 30 



" 54 

11:1,111 
10,86 



07 411 
123 HO 
19.26 



6.438 17 


2.460,02 


8,898 |.i 


1 Mi, 'I 


1 077 HI 


2 117 42 


11,20017 


2,460.02 


13,1 '' 


2,158.79 


1,686223 


8,795.02 



115.00 


4IIOO 


i 


4IKI 


4700 


1- -ii 


7M«! 


30 00 


15.00 


6.00 



00 00 

21.00 

i.ii mi 






1 





Total Furniture 4 linn, i 

Total 




Com. of Internal Revenue 81 

SCHEDULE J 

Depreciation 

Homer Laughlin Building: 

Treasury Department in Washington fixed the 
value of the Homer Laughlin Building property at 
$900,000.00 for estate tax purposes. As a separate 
value the land and building was not shown, the 
value of the building has been determined by using 
the precentages of the assessed valuation of the 
building to the total assessed valuation as shown on 
the 1932-33 tax bill. These values were as follows: 

Land $404,650.00 81% 

Building 95,240.00 19% 

$499,890.00 100% 

Building (19% of $900,000.00) $171,000.00 

Additions to December 31, 1940 11,826.60 

$182,826.60 

Depreciation— 31/3% of $182,826.60 _.... $6,093.61 

Equipment per Federal Estate Tax 

return 300.00 

Additions to 12/31/42 1,819.10 

$ 2,119.10 

Depreciation as 12/31/41 balance — 

(15% of $1,494.08) 224.11 

Less: Depreciation fully depreciated 

assets 197.44 



26.67 
Add : Depreciation on 1942 additions 15.63 42.30 

$6,135.91 



82 Estate of Homer Laughlin, vs. 

SCHEDULE J (Continued) 

Grand Central Public Market Depreciation (Sched- 
ule attached) 1,751.60 



Total 1942 Depreciation $7,887.51 



Analysis of Reserve for Depreciation 

Building Equipment Total 

1932 and 1933 $ 5,847.00 $ 79.42 $ 5,926.42 

1934 5,982.00 153.74 6,135.74 

1935 6,093.60 166.05 6,259.65 

1936 6,093.60 173.41 6,267.01 

1937 6,093.60 196.28 6,289.88 

1938 6,093.60 214.80 6,308.40 

1939 6,093.60 177.65 6,271.25 

1940 6,093.61 56.94 6,150.55 

1941 6,093.61 21.77 6,115.38 

1942 6,093.61 42.30 6,135.91 



$60,577.83 $1,282.36 $61,860.19 
1943. Filed September 10, 1943 



Com. of Internal Revenue 85 

[Title of Tax Court and Cause.] 

SUPPLEMENTAL STIPULATION OF FACTS 

It is hereby stipulated between the parties hereto, 
by their respective counsel, that certain proceedings 
have been had in the matter of the Estate of Homer 
Laughlin, deceased, Superior Court, Los Angeles 
County, California, as shown by the attached ex- 
cerpts from the Fifth Account Current of the 
Administrator with the Will Annexed and the 
Order of the Superior Court thereon. 

Dated: June 5, 1946. 

/s/ W. L. NOSSAMAN, 

Counsel for Petitioner, 
/s/ J. P. WENCHEL, ECC 

Chief Counsel, Bureau of 
Internal Revenue, Counsel 
for Respondent. [76] 

Excepts from Fifth Account Current and Report 
of Administrator with the Will Annexed Cover- 
ing the Period September 1, 1941, to June 30, 
1943. Filed September 10, 1943. 

In the Superior Court of the State of California 
In and for the County of Los Angeles 

No. 132875 
In the Matter of the Estate of 
HOMER LAUGHLIN, 

Deceased. 

FIFTH ACCOUNT CURRENT AND REPORT 
OF ADMINISTRATOR WITH THE WILL 
ANNEXED 

Beach D. Lyon, as Administrator With the Will 



86 Estate of Homer Laughlin, vs. 

Annexed of the Estate of Homer Laughlin, de- 
ceased, renders to the Court his Fifth Account 
Current and Report of his administration of said 
estate up to and including the 30th day of June, 
1943, as follows, to wit: 

Said Administrator With the Will Annexed is 
charged as follows: 

Balance at date of Fourth Account Current $1,031,472.36 

Received as rents, etc., from operation of Homer 
Laughlin Building, September 1, 1941, to June 
30, 1943 559,492.15 

Received from Department of Water and Power 
account alterations to office portion of Homer 
Laughlin Building 1,673.28 

Received from Clark Rynders balance on loans of 

July 28, 1941, and April 1, 1942 325.00 



Total Charges $1,592,962.79 

And he is entitled to credits as follows: 

Annuity $100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Annuity 100.00 

Total Credits $524,087.43 

Total Charges $1,592,962.7!) 

Total Credits 524,087.43 



1942 








Jan. 


2- 


-Ella West 


Buell, 


Feb. 


5- 


-Ella West 


Buell, 


March 


2- 


-Ella West 


Buell, 


April 


1- 


-Ella West 


Buell, 


May 


1- 


-Ella West 


Buell, 


June 


1- 


-Ella West 


Buell, 


July 


1- 


-Ella West 


Buell, 


Aug. 


1- 


-Ella West 


Buell, 


Sept. 


1- 


-Ella West 


Buell, 


Oct. 


1- 


-Ella West 


Buell, 


Nov. 


3- 


-Ella West 


Buell, 


Dec. 


2- 


-Ella West 


Buell, 



Chargeable to Next Account $1,068,875.36 



Com. of Internal Revenue 87 

[Verified by Beach I). Lyon, Administrator With 
the Will Annexed August 23, 1943.] [78] 
C-TS :PI) 
LA:DLR 



On October 1, 1943, the Court made the following 
order (certified copy hereto attached as Exhibit J) : 

"The report and fifth account current herein 
of Beach D. Lyon, as administrator with-will- 
annexed of the estate of said deceased, by Russ 
Avery, his attorney, coming on this 1st day of 
October, 1943, for hearing and settlement by the 
Court, all notices of said hearing having been 
given as required by law, showing, after de- 
ducting the credits to which said administrator 
with-will-annexed is entitled, a balance of 
$1,068,875.36, of which $47,586.86 is in cash, 
belonging to said estate, and the evidence hav- 
ing been heard, 

"It Is Ordered, Adjudged and Decreed by 
the Court that said account and report is 
hereby allowed, settled and approved." [79] 



88 Estate of Homer Laughlin, vs. 

EXHIBIT J 

On Oct. 1, 1943, in Department 25 of the Superior 
Court of the State of California in and for the 
County of Los Angeles, Hon. William R. McKay, 
judge, presiding, the following proceedings were 
had, to wit: 

Order Settling Fifth Account Current And Report 
Of Administrator With Will-Annexed 

631/288 

No. 132875 

In the Matter of the Estate of 

HOMER LAUGHLIN, 

Deceased. 

The report and fifth account current herein of 
Beach D. Lyon, as administrator with-will-annexed 
of the estate of said deceased, by Russ Avery, his 
attorney, coming on this 1st day of October, 1943, 
for hearing and settlement by the Court, all notices 
of said hearing having been given as required by 
law, showing, after deducting the credits to which 
said administrator with-will-annexed is entitled, a 
balance of $1,068,875.36, of which $47,586.86 is in 
cash, belonging to said estate, and the evidence 
having been heard, 

It Is Ordered, Adjudged and Decreed by the 
Court that said account and report is hereby al- 
lowed, settled and approved. 



Com. of Internal Revenue 89 

The foregoing instrument is a correct copy of the 
original as the same appears of record. 

Attest June 5, 1946. 

J. F. MORONEY, 

County Clerk and Clerk of the Superior Court of 
the State of California in and for the County 
of Los Angeles. 

By /s/ Y. NISHIHAWA, 

Deputy. 

[Endorsed] : Filed June 10, 1946. [80] 



[Title of Tax Court and Cause.] 

1. Decedent entered into an agreement with a 
beneficiary of a life annuity under his father's will 
whereby the beneficiary released her interest in that 
estate so the estate could be distributed to the 
residuary legatees of which the decedent was one 
upon the assignment to her of $100 per month for 
life of the rentals from a building owned by de- 
cedent. Held, that petitioner was not the owner of 
this $100 per month paid out of such rentals to the 
annuitant and it should not be included in petition- 
er's gross income. Blair v. Commissioner, 300 
U. S. 5. 

2. Several years prior to his death decedent en- 
tered into an agreement with his wife wherein he 
agreed to make certain monthly payments for life 
for her support and maintenance which was in- 
corporated in a divorce decree. Held, the payments 



90 Estate of Homer Laughlin, vs. 

were not deductible from gross income of decedent's 
estate. [81] 

OPINION 

Black, Judge: 

This proceeding involves a deficiency in income 
tax for the calendar year 1942 in the amount of 
$8,647.89. The deficiency is due to several adjust- 
ments to the net income of the estate of Homer 
Laughlin as disclosed by its return for the year 
1942. Petitioner, by appropriate assignments of 
error, contests two of these adjustments in the 
respective amounts of $1,200 and $9,600. These 
adjustments were explained by the respondent in 
a statement attached to the deficiency notice as 
follows : 

(a) There is restored to gross income, or 
disallowed as a deduction therefrom, under the 
applicable provisions of the Internal Revenue 
Code, the exclusion or deduction of $1,200.00 
shown in Schedule C of your return as "Less 
assignment of rent to Ella West." 

(d) The deduction of $9,600.00 claimed for 
payment to Ada Edwards Laughlin on account 
of " property settlement agreement with Homer 
Laughlin — $800.00 per month for life" is not 
allowable under the Internal Revenue Code. 

There are, therefore, two issues in this proceed- 
ing, namely, (1) whether the amount of $1,200 paid 
to Ella West under the facts hereinafter set forth 
is excludible or deductible from the gross income 



Com. of Internal Revi nue 91 

of decedent's estate for the calendar year 1942; and 
(2) whether the amount of $9,600 provided for in 
an agreement entered into between decedent and 
his wife, Ada Edwards Laughlin, and incorporated 

in a decree of divorce, is deductible from the gross 
income of decedent's estate for the calendar year 
1942. [82] 

All the facts are stipulated. The stipulation is 
incorporated herein by reference and adopted as 
our findings of fact. Such facts as are deemed neces- 
sary to an understanding of the issues decided are 
summarized below: 

Issue 1. Petitioner is the administrator with 
the will annexed of the estate of Homer Laughlin 
who died on December 27, 1932, a resident of Los 
Angeles, California. The estate is still in the pro- 
cess of administration. The income tax return of the 
estate for the taxable period involved was filed with 
the collector for the sixth district of California on 
or before March 15, 1943. Homer Laughlin, Sr., 
father of Homer Laughlin, died on or about Janu- 
ary 10, 1913, leaving a last will and testament 
dated August 30, 1909, duly admitted to probate on 
January 29, 1913, in the Superior Court of the 
State of California in and for the County of Los 
Angeles, which will contained, among other provi- 
sions, the following: 

Second: I give, devise and bequeath unto 
my nieces, Ella West and Nancy Mcintosh, 
each the sum of One Hundred dollars ($100) 
per month, payable quarterly to each of them 
during their natural life. 



92 Estate of Homer Laughlin, vs. 

After certain other legacies, bequests, and devises, 
the will gave the residue of the estate equally to 
decedent's son and daughter, Homer Laughlin and 
Guendolyn (or Guendolen) Virginia Laughlin. On 
August 1, 1921, Homer Laughlin and Ella West 
entered into a written agreement providing in part 
as follows: 

I, Ella West, in consideration of Five Hun- 
dred Dollars ($500.00) in hand paid to me, and 
in further consideration of an assignment of 
One Hundred Dollars ($100.00) per month of 
the rent to be paid by the lessee of the ground 
floor of the Laughlin Building, and in further 
consideration of the assumption of Homer 
Laughlin, Jr. to pay me the said sum of One 
Hundred Dollars ($100.00) per month during 
the remainder of my natural life, do hereby 
release the said Homer Laughlin, Jr., as 
Trustee, Guendolen V. Laughlin, and all of the 
property [83] comprising the estate of Homer 
Laughlin, deceased, late of Los Angeles, Cali- 
fornia, from the payment of the annuity pro- 
vided for in the will and decree of distribution 
in the estate of said Homer Laughlin, hereby 
releasing absolutely any claim of every char- 
aeter either against said persons or the prop- 
erty of said estate, the said lessee having 
recognized the said assignment and having 
agreed to pay to me the said sum monthly of 
the rent due and payable to the said Laughlin 
for the said ground floor of said building. 



Com. of Internal Revenue 93 

The purpose of this agreement was to obtain her 
consent to the distribution of the estate which was 
made thereafter in due course, pursuant to the 
court decree. 

The above-mentioned Laughlin Building is lo- 
cated at No. 315 South Broadway, Los Angeles, 
California. From about August 1, 1921, it was the 
property of Homer Laughlin. He acquired a one- 
half interest in the building as a devisee under his 
father's will and purchased the other half from his 
sister, Guendolyn, the funds for such purpose being 
obtained by the mortgage on such building to the 
Metropolitan Life Insurance Company. The Laugh- 
lin Building is a part of Homer Laughlin 's estate 
which has been in process of administration in the 
Superior Court of the State of California in and 
for the County of Los Angeles since about Febru- 
ary 4, 1933, on which date the will was duly ad- 
mitted to probate. In May, 1933, a dispute having 
arisen between Ella West and the estate of Homer 
Laughlin as to her rights under the agreement of 
August 1, 1921, a suit for declaratory relief was 
brought in the Superior Court of the State of Cali- 
fornia in and for the County of Los Angeles. On 
June 28, 1933, the court rendered its judgment 
against Beach D. Lyon and Beach D. Lyon, as 
Administrator with the will annexed of the estate 
of Homer Laughlin, deceased, which judgment pro- 
vided in part as follows: [84] 

* * * on the 1st day of August, 1921, Homer 
Laughlin assigned to the plaintiff Ella West 



94 Estate of Homer Laughlin, vs. 

One Hundred ($100) Dollars of the monthly 
rental due or to become due from the lessee 
of the ground floor of the Laughlin Building, 
which sum was to be paid to the plaintiff Ella 
West each month during the remainder of her 
natural life; that from and after said 1st day 
of August, 1921, Homer Laughlin had no right, 
title, or interest in and to said sum of One 
Hundred ($100) Dollars so assigned to this 
plaintiff; that the defendants Beach D. Lyon, 
and Beach D. Lvon as Administrator with the 
Will annexed of the estate of Homer Laughlin, 
have no right, title, or interest in and to the 
said sum of One Hundred ($100) Dollars of 
the monthly rental due or to become due from 
the lessee of the ground floor of the Laughlin 
Building, * * *. 

On July 7, 1933, the court made a further judg- 
ment in this suit determining the issues between 
plaintiff and the remaining defendants and reciting 
in part as follows: 

It Is Ordered, Adjudged and Decreed that 
on the 1st day of August, 1921, Homer Laughlin 
for valuable consideration assigned to the plain- 
tiff herein, Ella West, for the remainder of her 
natural life, the sum of $100.00 per month, said 
sum to be paid from the rent due from the 
tenant in possession of the ground floor of the 
Laughlin Building; 

And It Is Further Ordered, Adjudged and 
Decreed that defendant Grand Central Public 



Com. of Internal Eevenm 9~> 

Market, Inc., be and it is hereby ordered and 
authorized to pay to this plaintiff the sum of 
$100.00 per month during the natural life of 
said plaintiff so long as said Grand Central 
Public Market, Inc., remains in possession of 
the ground floor of the Laughlin Building, or 
so long as it is obligated on any lease of the 
ground floor of the Laughlin Building. 

And It is Further Ordered, Adjudged and 
Decreed that the defendant Citizens National 
Trust and Savings Bank of Los Angeles, a 
national banking association, as Trustee, and 
the defendant Grand Central Public Market, 
Inc., a corporation, have no right, title or in- 
terest in or to said sum of $100.00 per month 
so assigned by Homer Laughlin to Ella West. 

The lessee of the ground floor of the Laughlin 
Building was the Grand Central Public Market, Inc. 
which terminated on October 31, 1939, and petitioner 
leased the ground floor of the building to other 
tenants, negotiating and executing these leases. Ella 
West was not consulted nor did she in any manner 
participate therein. [85] 

During the taxable year 1942 petitioner paid to 
Ella West the sum of $1,200 pursuant to the agree- 
ment of August 1, 1921, between Homer Laughlin 
and Ella West and the Superior Court judgment 
of June 28, 1933. This sum was paid out of rentals 
received by petitioner from the ground floor of the 
Laughlin Building during that year. The gross and 
net rentals received by petitioner from that source 



96 Estate of Homer Laughlin, vs. 

for and during the taxable year 1942 were greatly 
in excess of the sum of $1,200. 

In the federal estate tax return filed by the estate 
of Homer Laughlin there was claimed under sched- 
ule entitled "Debts of Decedent " the following 
item: "Ella West ($100 per mo. Expectancy 11 
years. $16,610.00. ' : In the final determination of 
decedent's estate tax liability the Ella West claim 
was allowed as a deduction in the total amount of 
$9,194.05, such amount being the present value at 
the date of decedent's death of an annuity of $100 
per month payable during the expected life of Ella 
West, who was then 66 years of age. 

The first issue we have to decide is whether the 
$1,200 paid to Ella West during the year 1942 is 
either excludible or deductible from the gross in- 
come of the decedent's estate. Petitioner contends 
that the sums paid to Ella West were paid pursuant 
to an assignment or transfer of a corresponding 
interest by the decedent, Homer Laughlin, in the 
real property designated as the ground floor of the 
Laughlin Building; that to the extent mentioned 
Ella West had an interest in that property, and 
that as to the sums received and paid over to her 
the estate acted as a mere conduit; that for these 
reasons the $1,200 paid to Ella West is excludible 
from the gross income of the estate for 1942. In the 
alternative petitioner claims that the payments in 
question were required to be made and were made 
out of the income of the estate; that the $1,200 
represented income which was distributable [86] 
and was actually distributed during the taxable year 



Com, of Internal Keren ue 97 

to Ella West as a legatee, heir, or beneficiary and 
is deductible under the provisions of section 162(1)) 
of the Internal Revenue Code. 

Respondent contends that the sum of $1,200 paid 
by petitioner to Ella West during the year 1942 was 
for the satisfaction of a debt of Homer Laughlin, 
incurred during his lifetime in a capital transac- 
tion, and is not a distribution of income within the 
meaning of section 162(b). He further argues that 
in the federal estate tax return filed by the estate 
of Homer Laughlin, there was claimed as debts of 
the decedent the following item: "Ella West ($100 
per mo. Expectancy 11 years. $16,610.00"; that in 
the final determination of decedent's estate tax lia- 
bility the Ella West claim was allowed as a deduc- 
tion in the amount of $9,194.05, such amount being 
the present value at the date of the decedent's death 
of an annuity of $100 per month payable during 
the expected life of Ella West who was then 66 
years of age. He maintains that decedent's estate 
having had the benefit of a deduction of $9,194.05 as 
above set out, there has been a recognition that the 
sum represented a debt of the decedent, and it is, 
therefore, not deductible from the gross income of 
the estate. 

In deciding the issue which we have here to de- 
cide, it is not necessary for us to say whether the 
respondent acted properly in allowing to the estate 
of decedent for estate tax purposes a deduction of 
the commuted value of the annuity payments due 
to Ella West, based on her life expectancy at the 
time of decedent's death. We do not have the estate 



98 Estate of Homer Laughlin, vs. 

tax case before us and therefore have nothing to 
decide with respect to it. [87] 

What we have to decide is the legal effect of the 
agreement which Homer Laughlin made with Ella 
West on August 1, 1921. It is necessary to examine 
that document raid the circumstances attending its 
execution to determine its force and effect. In the 
last will and testament of the father of Homer 
Laughlin, he bequeathed to Ella West an annuity 
of $100 a month lor life. This annuity was payable 
in all events, whether the estate had income or not. 
It required no citation of authorities to support the 
proposition that it was a charge against all the 
property in Homer Laughlin, Sr.'s residuary estate. 
Homer Laughlin, Jr., and his sister were the equal 
beneficiaries of this residuary estate. One of the 
valuable assets of the residuary estate w T as the 
Laughlin Building situated in Los Angeles. Homer 
purchased his sister's one-half interest in this 
building and in order to secure the release of Ella 
West from her claim against the estate of Homer 
Laughlin, Sr., for the payment of a life annuity 
of $100 a month, Homer Jr. assigned to her irrev- 
ocably $100 a month for life out of the rents from 
the ground floor of the Laughlin Building. This, 
it seems to us, was more than a mere assignment 
of future income as that term is commonly under- 
stood, but was an assignment of a property interest 
to Ella West in the rentals from the ground floor 
of the Laughlin Building. This is the effect of the 
judgment of the Superior Court of California in 
and for the County of Los Angeles in Cause No. 



Com. of Internal Revemu 99 

356,776 in which Ella West was plaintiff and Beach 
D. Lyon, individually and Beach D. Lyon, as ad- 
ministrator were defendants. The judgement in 
that cause has been set out above. It seems to us 
there can be no question but that the Superior 
Court has correctly interpreted the terms of the 
agreement between Ella and Homer. We shall so 
regard it in deciding issue 1. [88] 

Petitioner relies chiefly on Blair v. Commis- 
sioner, 300 U. S. 5. In that case the life beneficiary 
of a testamentary trust assigned to his children 
"an interest amounting to $6,000 for the remainder 
of that calendar year, and to $9,000 in each calendar 
year thereafter, in the net income which the peti- 
tioner was then or might thereafter be entitled to 
receive during his life. ? ' The Court held that where 
the life beneficiary of a trust assigned a share of 
the income to another for life without retaining anv 
form of control over the interest assigned, the as- 
signment was a transfer in praesenti to the donee 
of a life interest in the corpus of the trust property 
and the income paid to the donee was taxable to 
him and not the donor. We think the Blair case 
is applicable and controlling here. In the Blair 
case, the Court in speaking of the nature and effect 
of the irrevocable assignment which had been made 
said: 

* * * The assignment of the beneficial inter- 
est is not the assignment of a chose in action 
but of the " right, title, and estate in and to 
property.' ' [Citing authorities.] 



100 Estate of Homer Laughlin, vs. 

We conclude that the assignments were valid, 
that the assignees thereby became the owners 
of the specified beneficial interests in the in- 
come, and that as to these interests they and 
not the petitioner were taxable for the tax 
years in question. * * * 

In the instant case Homer Laughlin was not only 
the beneficial owner of the Laughlin Building, he 
was the actual owner in fee simple of the building 
and unquestionably had the right to convey the in- 
terest which he did convey to Ella West. Therefore, 
in view of what the Supreme Court said in the 
Blair case, we hold that the $1,200 in question 
should be excluded from the income of petitioner. 
It did not belong to him — it was the property of 
Ella West. See Herbert R. Graf, 45 B.T.A. 386, 
which we also think is an applicable authority 
which supports our decision here. [89] 

Having held that such amount is to be excluded 
from petitioner's income, it becomes unnecessary to 
pass upon petitioner's alternative contention that 
if the estate is not entitled to have such amount ex- 
cluded from gross income, it is entitled to have 
such payment allowed as a deduction in computing 
net income. 

We think the facts of the instant case distinguish 
it from such cases as Corbett Investment Co. v. 
Helvering, 75 Fed. (2d) 525, 15 AFTR 234, affirm- 
ing Memorandum Opinion of the Board. The Cor- 
bett case was a case where a decedent bequeathed 
to his widow an annual sum payable monthly from 



Com. of Internal Revenue 101 

income of realty devised to grandsons, and the 
widow released the realty From this obligation and 
accepted the personal undertaking of the grandsons 
to continue the payment of the annuity and subse- 
quently the grandsons conveyed the realty to a cor- 
poration which assumed liability for the monthly 
payments. On these facts the court held thai the 
transactions between the widow and grandsons and 
between the grandsons and the corporation were 
in the nature of a purchase and that the annual 
payments made to the widow were capital expendi- 
tures and not deductible by the corporation even 
though the payments were taxable to the widov . 
In thus holding the court said: 

* * * In this case, from the time of the 
transfer of the real estate to petitioner from 
the grandsons, petitioner received all the rents 
in its own right and so far as we are told by 
anything in the record, it had the right and the 
power to use them without accountability to 
the widow or any one else, and the widow's only 
right was to demand and receive from peti- 
tioner a thousand dollars monthly, regardless 
of the source from which it came. The pay- 
ments to her, therefore, were clearly taxable 
to petitioner, even though they were also tax- 
able to her. * * * [Underscoring supplied.] [90] 

As we have already pointed out in the agreement 
of August 1, 1921, between Homer and Ella, Homer 
definitely assigned to her $100 of the rent from the 
Laughlin Building for the remainder of her nat- 
ural life. It was under these facts that the Superior 



102 Estate of Homer Laughlin, vs. 

Court of Los Angeles held that Ella was the owner 
of this income right to receive $100 a month from 
the Laughlin Building and that: 

* * * Homer Laughlin had no right, title, or 
interest in and to said sum of One Hundred 
($100) Dollars so assigned to this plaintiff; 
that the defendants Beach D. Lyon, and Beach 
D. Lyon as Administrator with the Will an- 
nexed of the estate of Homer Laughlin, have 
no right, title or interest in and to the said sum 
of One Hundred ($100) Dollars of the 
monthly rental due or to become due from the 
lessee of the ground floor of the Laughlin 
Building, * * *. 

It is because of the foregoing facts that we think 
the instant case is distinguishable from Corbett 
Investment Co. v. Helvering, supra, and other cases 
of that kind which have followed it. 

Issue 2. On or about April 1, 1924, Homer 
Laughlin and his then wife, Ada Edwards Laughlin, 
entered into a property and support and mainte- 
nance settlement agreement which was approved 
and affirmed in an interlocutory decree of divorce- 
dated September 24, 1924, in the Superior Court 
of the State of California in and for the County of 
Los Angeles and in a final decree dated September 
29, 1925, pursuant thereto. The agreement provided 
that Homer Laughlin pay his wife a life income 
of $800 per month provided, however, that if the 
parties should be divorced and his wife should re- 
marry then these payments should be reduced to 



Com. of Internal Revenue 103 

$300 monthly. It also provided that, in order to 
secure the faithful performance of the terms and 
conditions of this agreement, it was agreed that the 
Homer Laughlin Building should be hypothecated 
as security for the faithful performance of the 
terms and conditions of the agreement. The agree- 
ment provided in part as follows: 

9. In order to secure the faithful perform- 
ance of the terms and conditions of this agree- 
ment, the party of the first part covenants and 
agrees that that certain real estate, together 
with the improvements thereon, known as the 
"Homer Laughlin Building,'' located between 
Third and Fourth Streets, on the west side of 
Broadway, in the city of Los Angeles, state of 
California, shall be and is hereby hypothecated 
as security for the faithful performance of all 
of the terms and conditions of this agreement, 
and especially for the payment of the said 
monthly installments of $800 each, * * * 

It was also agreed that if the Homer Laughlin 
Building should be sold, Homer Laughlin should 
deposit with a trust company the sum of $150,000, 
which trust fund should stand as security for the 
faithful performance of all the terms and condi- 
tions of this agreement in lieu of the Homer 
Laughlin Building. It was further agreed that if 
Homer Laughlin should at any time create a trust 
fund of $150,000 or shall furnish the wife an in- 
surance policy guaranteeing the performance of 
the terms of this agreement by Homer Laughlin, 



104 Estate of Homer Laughlin, vs. 

the wife agreed to release the Homer Laughlin 
Building from the lien or obligation of the contract. 
It was provided that these payments shall survive 
the death of Homer Laughlin and shall be binding 
upon his estate. 

The final judgment of divorce made and entered 
September 29, 1925, decreed in part that: [92] 

* * * the property settlement agreement, re- 
ferred to in the interlocutory decree in this 
action and by reference made a part thereof, 
is hereby ratified, approved and confirmed, and 
the property of the parties hereto is hereby 
assigned in accordance with the terms of said 
agreement and the other rights and obligations 
of the parties hereto are assigned, determined 
and adjudged in accordance with the terms of 
said agreement, which agreement is hereby 
made a part of this judgment and is in words 
and figures as follows, to wit: * * *. 

During his lifetime Homer Laughlin paid to Ada 
Edwards Laughlin $800 per month as provided in 
the settlement agreement. Ada Edwards Laughlin 
is living at the date hereof and has never remarried. 
The Homer Laughlin Building was not sold by 
Homer Laughlin nor by his estate. The trust fund 
above referred to has never been established nor 
has the insurance policy been furnished guarantee- 
ing Homer Laughlin 's performance of the terms of 
the settlement agreement. 

During the taxable year 1942, petitioner paid to 
Ada Edwards Laughlin the sum of $9,600 pursuant 






Com. of Internal Revenue 105 

to the April 1, 1924 agreement and the coin*t de- 
crees in the divorce 4 action. 

In Schedule 1 "Debts of Decedent' of the fed- 
eral estate tax return of the estate of Homer Laiigh- 

lin, the following item was claimed as a deduction: 

Indebtedness in favor of Ada Edwards 
Laughlin, in pursuance of Property Settle- 
ment Agreement, dated April 1, 1924, approved 
by Decree of Superior Court of the State of 
California, in and for the County of Los An- 
geles, and secured as a lien on the building, 
subject to Trust Deed in favor of Metropolitan 
Life Insurance Co. (To return $9600.00) Ex- 
pectancy 16 years $152,480.00. 

In the first audit of the return this item was re- 
duced by the Commissioner to $101,259.35 but was 
later eliminated by the Commissioner in the man- 
ner hereinafter set forth. On October 22, 1938 
petitioner filed a claim for refund in the amount 
of $2,500 on account of certain omitted expense 
items such as attorneys fees and miscellaneous ad- 
ministrative expenses. These expenses were later 
adjudgd and determined and an adjustment made 
for [93] additional debts owing by the decedent 
but the claim for refund was rejected for the rea- 
son that the above amount of $101,259.35, repre- 
senting decedent's liability on the separation agree- 
ment of April 1, 1924, had been erroneously in- 
cluded as a deduction in the prior determination of 
the estate tax liability. The Commissioner's letter 
dated October 25, 1939, stated that this amount was 



106 Estate of Homer Laughlin, vs. 

not a proper deduction under section 812(b) of 
the Internal Revenue Code. Petitioner has taken 
no action with regard to said claim and the same 
is now barred by the statute of limitations. 

The gist of petitioner's argument that decedent's 
estate is entitled to a deduction of the $9,600 paid 
to Ada Edwards Laughlin is that it is clear that 
if Homer Laughlin were living he would be en- 
titled to the benefit of section 23 (u), I.R.C. 1 Peti- 
tioner further argues that the payment of the 
$9,600 in question is taxable to Ada E. Laughlin 
under the provisions of section 22(k), I.R.C. 2 



^ec. 23. Deductions from Gross Income. 

In computing net income there shall be allowed 

as deductions: 

******* 

(u) Alimony, etc., Payments. — In the case of a 
husband described in section 22 (k), amounts in- 
cludible under section 22 (k) in the gross income of 
his wife, payment of which is made within the hus- 
band's taxable year. If the amount of any such 
payment is, under section 22 (k), or section 171, 
stated to be not includible in such husband's gross 
income, no deduction shall be allowed with respect 
to such payment under this subsection. 

2 Sec. 22. Gross Income. 

******* 

(k) Alimony, etc., Income. — In the case of a wife 
who is divorced or legally separated from her hus- 
band under a decree of divorce or of separate 
maintenance, periodic payments (whether or not 
made at regular intervals) received subsequent to 
such decree in discharge of, or attributable to 
property transferred (in trust or otherwise) in dis- 
charge of, a legal obligation which, because of the 
marital or family relationship, is imposed upon or 



Com. of Internal Revenue 107 

Homer Laughlin, the husband, is now dead and his 

estate is in process of administration and therefore 
section 23(u) is not applicable. 

Is the estate of Homer Laughlin entitled to the 
deduction of the $9,600 the same as Homer would 
be entitled were he still living^ Respondent con- 
tends the question should he answered no. He 
argues that inasmuch as the recent decisions allow 
as a deduction from a decedent husband's estate the 
commuted value of the claim for monthly payments 
to a wife for life under a decree of divorce for 
estate tax purposes, cf. Estate of Pomeo M. Maresi, 
6 T. C. 583, affirmed Fed. (2d) , such pay- 
ments should not be allowed the estate as a deduc- 
tion for income tax purposes. Respondent contends 
that if our Court should allow the petitioner's 
claim in this case it will be contrary to Regulations 
111, section 29.162-1, printed in the margin. 3 He 

incurred by such husband under such decree or 
under a written instrument incident to such divorce 
or separation shall be includible in the gross income 
of such wife, and such amounts received as are 
attributable to property so transferred shall not 
be includible in the gross income of such hus- 
band. * * * 

Regulations 111. 

Sec. 29.162-1. Income of Estates and Trusts. — 
In ascertaining the tax liability of the estate of a 
deceased person or of a trust, there are deductible 
from the gross income, subject to exceptions, the 
same deductions which are allowed to individual 
taxpayers. See generally section 23, and the provi- 
sions thereof governing the right of deduction for 
depreciation and depletion in the case of property 



108 Estate of Homer Laughlin, vs. 

says that under the Maresi case the commuted value 
of the future payments to Homer Laughlin 's di- 
vorced wife was deductible as an indebtedness of 
the estate. "Ordinarily" continues respondent, u the 
payment of a debt of a decedent does not furnish 
a foundation for an income tax deduction." At 
this point it may be remarked that although the 
estate of Homer Laughlin claimed as a deduction 
on the estate tax return the commuted value of the 
payments to be made to Ada Edwards Laughlin 
based on her life expectancy of 16 years, $152,480, 
the Commissioner disallowed such deduction. The 
stipulated facts with reference to the course of that 
claimed deduction are given above. Petitioner does 
not claim, however, that the Commissioner is 
estopped from making his present contention be- 
cause of any disallowance which he may have made 
of the claimed deduction for estate tax purposes. 
It seems plain there is no estoppel. Petitioner con- 
cedes that ordinarily the payment of a debt of a 

held in trust. Amounts allowable under section 
812(b) as a deduction in computing the net estate 
of a decedent are not allowed as a deduction under 
section 23, except subsection (w), in computing 
the net income of the estate unless there is filed in 
duplicate with the return in which the item is 
claimed as a deduction a statement to the effect that 
the items have not been claimed or allowed as de- 
ductions from the gross estate of the decedent under 
section 812(b) and a waiver of any and all right 
to have such item allowed at any time as a deduc- 
tion under section 812(b). For items not deductible, 
see section 24. Against the net income of the estate 
or trust there are allowable certain credits, for 
which see sections 25 and 163. 



Com. of Internal Revenue 109 

decedent by his estate does not furnish a foundation 
for an income tax deduction. Petitioner claims, 
however, that the estate of Homer Laughlin is en- 
titled to deduct the $9,600 in question because of 
certain definite statutory provisions to which we 
shall presently refer. Petitioner's argument on this 
phase of the issue is somewhat involved but we 
think we state it with substantial accuracy as 
follows: 

Section 162, I.R.C. is applicable to the estates 
of decedents. Section 162(b) provides that there 
shall be allowed as a deduction in computing' the 
net income of the estate the amount of the income 
for the taxable year which is to be distributed cur- 
rently by the fiduciary to the legatee, heirs or bene- 
ficiaries, but the amount so allowed as a deduction 
shall be included in computing the net income of 
the legatees, heirs or beneficiaries whether [96] 
distributed to them or not. Section 171(b) of the 
Internal Revenue Code 4 provides that "for the pur- 
poses of computing the net income of the estate or 



4 Sec. 171. Income of an Estate or Trust in Case 
of Divorce, etc. [Added by § 120, 1942 Act.] 

* * # •* * * * 

(b) Wife Considered a Beneficiary. — For the 
purposes of computing the net income of the estate 
or trust and the net income of the wife described in 
section 22 (k) or subsection (a) of this section, such 
w T ife shall be considered as the beneficiary specified 
in this supplement. A periodic payment under sec- 
tion 22(k) to any part of which the provisions of 
this supplement are applicable shall be included in 
the gross income of the beneficiary in the taxable 
year in which under this supplement such part is 
required to be included. 



110 Estate of Homer Laughlin, vs. 

trust and the net income of the wife described in 
section 22 (k) or subsection (a) of this section, such 
wife shall be considered as the beneficiary specified 
in this supplement," Under section 22 (k) a "wife" 
is an ex-wife "divorced * * * from her husband" 
who is receiving periodic payments "in discharge 
of * * * a legal obligation which * * * is imposed 
upon or incurred by such husband under such de- 
cree or under a written instrument incident to such 
divorce * * V Ada Edwards Laughlin is therefore 
a "wife" described in section 22 (k). Being such 
a wife she is the "beneficiary" specified in section 
171(b) and as such the periodic payments to her 
are includible in her income and these payments are 
deductible by the estate under section 162(b). Such 
is petitioner's argument. 

Although respondent does not argue the meaning 
of section 171(b) in his brief, the Treasury Regula- 
tions are apparently in conflict with what the peti- 
tioner contends. Regulations 111, section 29.23 (u)-l 
provides in part: [97] 

The deduction under section 23 (u) is allowed 
only to the obligor spouse. It is not allowed to 
an estate, trust, corporation, or any other 
person who may pay the alimony obligation of 
such obligor spouse. * * * 

The legislative history of section 171(b) does not 
disclose that it was enacted to accomplish the pur- 
pose claimed by petitioner. In the Senate Finance 
Committee Report which accompanied the Revenue 



Com. of Internal Revenue 111 

Bill of 1942 it is said, among other things, with 
reference to section 171 included in that bill: 

* * * For the purpose of clarity, this sec- 
tion provides that the wife entitled to receive 
the payment is considered as the beneficiary of 
the trust. If these provisions of section 171(b) 
a PPly I0 an } r part of a periodic payment re- 
quired under section 22 (k) to be included in 
income of the beneficiary, the whole of such 
periodic payment shall be included in gross 
income of the beneficiary in the taxable year 
in which under the above provisions of section 
171(b) such part is required to be included in 
her income. It is contemplated under these 
provisions that the trust or estate will be en- 
titled to a deduction in computing its net in- 
come for amounts required to be included in 
the wife's income under section 22 (k) or sec- 
tion 171 to the extent that such amounts are 

paid, credited, or to be distributed out of in- 
come of the estate or trust for its taxable year. 
[Emphasis supplied.] 

By a reference to the facts which we have given 
under this issue 2, it will be seen that the $800 
monthly which Homer Laughlin was to pay his 
divorced wife for her support and maintenance was 
to be paid in all events. If he had sufficient income 
wdth which to pay it, well and good. If on the 
contrary in any particular year he had no net in- 
come, the $800 per month nevertheless had to be 
paid. Under these circumstances when Homer 



112 Estate of Homer Lauglilin, vs. 

Laughlin died and bis estate had to continue to 
make the payments we do not think that it can be 
said that his divorced wife, Ada, was an income 
beneficiary of his estate to whom $800 j)er month 
was currently distributable under section 162(b). 
We think a reading of section 162(b) will dis- 
close that petitioner's construction of the meaning 
of 171(b) is not correct. Section 162(b), I.R.C., 
as amended by the Revenue Act of 1942, reads as 
follows : 

(b) There shall be allowed as an additional 
deduction in computing the net income of the 
estate or trust the amount of the income of the 
estate or trust for its taxable year which is to 
be distributed currently by the fiduciary to the 
legatees, heirs, or beneficiaries, but the amount 
so allowed as a deduction shall be included in 
computing the net income of the legatees, heirs, 
or beneficiaries whether distributed to them or 
not. As used in this subsection " income which 
is to be distributed currently" includes income 
for the taxable year of the estate or trust 
which, within the taxable year, becomes pay- 
able to the legatee, heir, or beneficiary. Any 
amount allowed as a deduction under this para- 
graph shall not be allowed as a deduction under 
subsection (c) of this section in the same or 
any succeeding taxable year; 

As we have already indicated, if decedent's di- 
vorced wife Ada had been one to whom income was 
currently distributable by the estate, then it is 



Com. of Internal Revenue 113 

reasonable to believe thai she would be a "benefi- 
ciary" of the estate as provided by section 171(b), 
upon which petitioner relies. However, there was 
no condition in the divorce settlement that the 
$9,600 annually was to be paid to her out of in- 
come. Therefore, it seems to us that section 171(b) 
is not applicable to a situation such as we have 
here. When decedent died his estate was entitled 
to deduct for estate tax purposes, as indebtedness 
ow T ing to Ada Edwards Laughlin the commuted 
value of the payments to be made to her for life. 
Cf. Pomeo M. Maresi, supra. Petitioner, the estate 
of Homer Laughlin, deceased, is not entitled by vir- 
tue of section 171(b), I.R.C. carried in the Revenue 
Act of 1942 to deduct from its net income the $9,600 
paid in the taxable year to Ada Edwards Laughlin. 
On this issue the respondent is sustained. 

Reviewed by the Court. 

Decision will be entered under Rule 50. 

Disney, J., concurs only in the result. 

[Seal] [99] 

Opper, J., concurring: 

The conclusion reached here seems to me entirely 
sound, but I am doubtful whether the first point is 
properly founded on Blair v. Commissioner, 300 
U. S. 5. The scope of that opinion has been radi- 
cally narrowed by Harrison v. Schaffner, 312 U. S. 
579. Those two cases, as well as such decisions as 
Helvering v. Horst, 311 U. S. 112, deal with the 
vexatious and intricate question of the validity for 



114 Estate of Homer Lauglilin, vs. 

tax purposes of anticipatory and gratuitous trans- 
fers of future income. If decedent's assignment of 
the prospective rents without a conveyance of the 
property which produced them had been a gift, I 
think we should have had to deal with the question 
left open in Harrison v. Schaffner, since decedent 
concededly failed to part with the income for the 
full term of his estate, as in the Blair case. In the 
Schaffner case the Supreme Court said : 

* * * Even though the gift of income be in 
form accomplished by the temporary disposi- 
tion of the donor's property which produces the 
income, the donor retaining every other sub- 
stantial interest in it, we have not allowed the 
form to obscure the reality. * * * 

And as we pointed out in Herbert R. Graf, 45 
B.T.A. 386: 

* * * The Court said in the last paragraph 
of the Schaffner opinion that future decisions 
will have to determine precisely where the line 
shall be drawn between gifts of income-pro- 
ducing property and gifts of income from 
property of which the donor remains the 
owner * * . * 

When, however, we come to deal with transfers 
for a valuable consideration as in this case and in 
Herbert R. Graf, supra, a different situation arises. 
It is then " unnecessary to determine just exactly 
how many incidents of ownership * * * were ac- 
quired * * * since the taxing acts are not so much 
concerned with the refinements of title as with the 



Com. of Internal Hevenue 115 

actual command over the income which is taxed and 
the actual benefit for which the tax is paid." Her- 
bert R. Graf, supra. [100] 

A more satisfactory ground for the decision in 
the present proceeding would seem to me, by view- 
ing the transaction as a whole, to recognize that the 
decedent had acquired a wasting asset for which 
he and his estate were entitled to take deductions 
for depreciation. In such a situation the payments 
received and the deductions allowed, being both for 
the life of the annuitant, would offset each other. 
H. Edward Wolff, 7 T. C. 717. And even though 
the petitioner estate happens to have been permit- 
ted a deduction based upon the annuitant's claim, 
any basis thereby acquired for the estate is shown 
here to have been exhausted. The facts show that 
the amount allowed as a deduction for the annui- 
tant's claim was $9,194.05. Making the reasonable 
assumption that the estate has paid the required 
$1,200 each year for the nine years following de- 
cedent's death, the total paid to the end of the year 
1941 was $10,800. Any benefit conferred upon the 
estate by the permitted deduction had thus been 
used up before the beginning of the present tax 
year, with the consequence that the process of ex- 
haustion is continuing beyond the period for which 
any claim has been allowed. If the proposed defi- 
ciency were disapproved on that ground, the depre- 
ciation being exactly equal to the proposed addition 
to income, H. Edward Wolff, supra, there would 
have been no necessity for mentioning the compli- 



116 Estate of Homer Lauglilin, vs. 

cated question lurking in the Court's disposition 
of the first sisue. 

Murdock and Kern, JJ., agree with the above. 
[Seal] [101] 



[Title of Tax Court and Cause.] 

RESPONDENT'S COMPUTATION FOR 
ENTRY OP DECISION 

The attached proposed computation is submitted, 
on behalf of the respondent, to The Tax Court of 
the United States, in compliance with its opinion 
determining the issues in this proceeding. 

This computation is submitted in accordance with 
the opinion of the Court, without prejudice to the 
respondent's right to contest the correctness of the 
decision entered herein by the Court, pursuant to 
the statutes in such cases made and provided. 

J. P. WENCHEL, 

Chief Counsel, 

Bureau of Internal Revenue. 

Of Counsel : 

B. H. NEBLETT, 

Division Counsel. 

E. C. CROUTER, 
E. A. TONJES, 

Special Attorneys, 

Bureau of Internal Revenue. 
EAT/ftc 2/5/47. [102] 



Com. of Internal Revenue 117 

RECOMPUTATION STATEMENT 



Feb. 3/1947 
In re: Estate of Homer Laughlin, Deceased 

Mr. Beach D. Lyon, Administrator 

315 South Broadway 

Los Angeles 13, California 

Docket No. 5891 
Income Tax Liability 

Year Tax Liability Tax Assessed Deficiency 

1942 $35,567.38 $29,819.49 $7,747.89 

The following recomputation has been made under 
Rule 50 pursuant to the findings of The Tax Court 
of the United States, promulgated January 16, 
1947. 

1942 Net Income 

Net income per statutory notice dated 6/6/44 $67,203.18 

As adjusted in accordance with Tax Court decision 66,003.18 



Difference (decrease) $ 1,200.00 



Explanation of Adjustment 

The Tax Court holds that the $1,200.00, rent from 
the Laughlin Building which was paid to Ella West 
in accordance with written agreement between 
Homer Laughlin and Ella West, should be excluded 
from the income of petitioner. 



118 Estate of Homer Lauglilin, vs. 

Computation of Tax 

Adjusted net income $66,003.18 

Less: Personal exemption 500.00 

Normal tax and surtax net income $65,503.18 

Normal tax at 6% on $65,503.18 $ 3,930.19 

Surtax on $65,503.18 33,637.11) 

Total income tax $37,567.38 

Assessed, account number 37359 29,819.49 



Deficiency $ 7,747.89 



HCLynn/bc 

1/28/47 

[Endorsed]: Received and filed Feb. 17, 1947. 



Com. of Interna] Eeventu 119 

The Tax Court of the Tinted States 
Washington 

Docket No. 5891. 

ESTATE OF HOMER LAUGHLIN, Deceased, 
BEACH D. LYON, Administrator with the 
will annexed, 

Petitioner, 



vs. 



COMMISSIONER OF INTERNAL REVENUE 

Respondent. 

DECISION 

Pursuant to the determination of the Court as 
set forth in its Opinion promulgated January 16, 
1947, the respondent herein filed a proposed recom- 
putation on February 17, 1947, which was not con- 
tested by the petitioner when called for hearing 
March 26, 1947, now therefore, it is 

Ordered and Decided: That there is a deficiency 
in income tax for the calendar year 1942 in the 
amount of $7,747.89. 

[Seal] /s/ EUGENE BLACK, 

Judge. 

Enter : 

Entered Mar. 26, 1947. [104] 



120 Estate of Homer LaugMin, vs. 

In the United States Circuit Court of Appeals for 

the Ninth Circuit 

Tax Court Docket No. 5891. 

ESTATE OF HOMER LAUGHLIN, Deceased, 
BEACH D. LYON, Administrator with will 
annexed, 

Petitioner on Review, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent on Review. 

PETITION FOR REVIEW AND ASSIGN- 
MENTS OF ERROR 

To the Honorable Judges of the United States 
( Jircuit Court of Appeals for the Ninth Circuit : 

Now comes the Estate of Homer Laughlin, 
Deceased, Beach D. Lyon, Administrator with the 
will annexed, by its attorneys Joseph D. Brady and 
Walter L. Nossaman, and respectfully shows: 

I. 

Jurisdiction 

That the petitioner on review (hereinafter some- 
times referred to as the petitioner) is a probate 
estate in course of administration in the Superior 
Court of the State of California, in and for the 
County of Los Angeles, being Probate Cause No. 
132875 therein, and Beach D. Lyon is the duly ap- 
pointed, qualified and acting administrator with 
will annexed of said estate; the respondent on re- 



Com. of Internal Revenue 121 

view is the duly [105] appointed, qualified and 
acting Commissioner of Internal Revenue; the fed- 
eral income tax return of the Estate 1 of Homer 
Laughlin, deceased, for the taxable year 1942 was 
filed with the Collector of Internal Revenue for 
the Sixth District of California, located at Los An- 
geles, which collection district is within the juris- 
diction of the Circuit Court of Appeals for the 
Ninth Circuit, wherein this review is sought. This 
petition for review is filed pursuant to the pro- 
visions of Sections 1141 and 1142 of the Internal 
Revenue Code. 

II. 

Prior Proceedings 

On June 6, 1944, respondent advised petitioner 
that the determination of its income tax liability 
for the taxable year 1942 disclosed a deficiency in 
tax in the sum of $7,977.09. Thereafter on August 
28, 1944, petitioner filed a petition with The Tax 
Court of the United States for a redetermination 
of the proposed deficiency. Respondent, thereafter 
in due course, filed his answer to the petition and 
the case was heard before the Tax Court on June 
10, 1946, at Los Angeles, California. On January 
16, 1947, the Tax Court promulgated its opinion 
and on March 26, 1947, it rendered its decision 
ordering and deciding that there is a deficiency in 
payment of the income tax of the Estate of Homer 
Laughlin, deceased, for the taxable year 1942 in 
the amount of $7,747.89. [106] 



122 Estate of Homer Laughlin, vs. 

III. 

Nature of Controversy 

The decedent, Homer Laughlin, who died De- 
cember 27, 1932, had on April 1, 1924, entered into 
a property settlement agreement with his wife, Ada 

'wards Laughlin, under the terms of which the 

cedent was required to pay to his wife $800 per 
month during her life for her support and mainte- 
nance, the stipulated payments being expressly 
made the obligation of Homer Laughlin 's estate if 
lie should predecease Ada Edwards Laughlin. The 
property settlement agreement was approved and 
confirmed bv interlocutory and final decrees there- 
after made on September 24, 1924, and September 
29, 1925, respectively, in a divorce suit brought by 
Ada Edwards Laughlin against Homer Laughlin. 

In the taxable year 1942, petitioner paid Ada 
Edwards Laughlin $9600 in accordance with the 
property settlement agreement and court decrees 
above mentioned. Petitioner contends that the $9600 
s< i paid by it to Ada Edwards Laughlin was deduct- 
ible from its income for the year 1942. The right to 
this deduction was denied by the Tax Court. 

IV. 

Assignments of Error 

The petitioner being aggrieved by the opinion and 
decision of The Tax Court of the United States in 
this proceeding, hereby petitions for a review of 
said opinion and [107] decision and for the correc- 
tion of the errors which, as petitioner believes and 
alleges, occurred therein to the prejudice of peti- 



Com. of Internal Be 123 

tioner. The errors relied upon by the petitioner 
the basis for this petition for review are as folio 1 rs : 

The Tax Court of the United States erred: 

1. In holding and deciding that the sum of 

- 'iOO paid by the petitioner to Ada Edwards 
Laughlin during the taxable year 1942 was not 
deductible for federal income tax pur 
from the income of the petitioner for that year. 

2. In holding and deciding that there was 
any deficiency in any sum whatever in the pay- 
ment of the petitioner's federal income tax 
the taxable year 1942. 

3. In rendering an opinion and decision 

which, in the respects above enumerated, are 
contrary to the law and the regulations, and 
not supported by the evidence in the case. 

Wherefore, petitioner prays that the findings of 
fact and opinion and decision of The Tax Court of 
the United States be reviewed by the Circuit Court 
of Appeals for the Ninth Circuit; that a transcript 
of the record be prepared in acordancce with the 
law and the rules of said Court and be transmitted 
to the Clerk of said Court for filing, and that appro- 
priate action be taken to the end that the err 
herein complained of may be reviewed and <• 
rected by said Court. 

/s/ JOSEPH D. BRADY, 
,/s/ WALTEB L. NOSSAMAN, 
i iunse] for Petitioner on 
Review. 

[Endorsed]: Filed T.C.U.S., June 10, 1947. 



124 Estate of Home)* LaugKlin, vs. 

[Title of Circuit Court of Appeals and Cause.] 

NOTICE OF FILING PETITION 
FOR REVIEW 

To the Honorable Joseph D. Nunan, Jr., 
Commissioner of Internal Revenue. 

You are hereby notified that the Estate of Homer 
Laughlin, deceased, Beach D. Lyon, Administrator, 
with will annexed, did, on the 20th day of June, 
1947, file with the Clerk of The Tax Court of the 
United States, at Washington, D.C., a petition for 
review by the L T nited States Circuit Court of Ap- 
peals for the Ninth Circuit, of the decision of the 
Tax Court heretofore rendered in the above-entitled 
cause. A copy of the petition for review and the 
assignments of error filed therewith is hereto at- 
tached and served upon you. 

Dated this 20th day of June, 1947. 

/s/ JOSEPH D. BRADY, 

/s/ WALTER L. NO S SAM AN, 

Counsel for Petitioner on 
Review. 

Service of the foregoing notice, together with a 
copy of the petition for review and assignments of 



Com. of Internal Revenue 125 

error mentioned therein is acknowledged this 20th 
day of June, 1947. 

JOSEPH D. NUNAN, JR., 
Commissioner of Internal 
Revenue, 
Respondent on Review. 

By J. P. WENCHEL, CAR 

Counsel. 

[Endorsed] : Filed T.C.U.S. June 20, 1947. [110] 



[Title of Circuit Court of Appeals and Cause.] 

STATEMENT OF POINTS ON WHICH PETI- 
TIONER ON REVIEW INTENDS TO RELY 

To Commissioner of Internal Revenue and to J. P. 
Wenchel, Chief Counsel, Bureau of Internal 
Revenue, and E. A. Tonjes, Esq. : 

Please take notice that the Estate of Homer 
Laughlin, deceased, Beach D. Lyon, Administrator 
with will annexed, petitioner on review in the above- 
entitled cause, intends to rely on the review on the 
following points: 

That the Tax Court of the United States erred : 

1. In holding and deciding that the sum of 
$9600 paid by the petitioner to Ada Edwards 
Laughlin during the taxable year 1942 was not de- 
ductible for federal income tax purposes from the 
income of the petitioner for that year. 



126 Estate of Homer Laughlin, vs. 

2. In holding and deciding that there was any 
deficiency in any sum whatever in the payment of 
the petitioner's federal income tax for the taxable 
year 1942. 

3. In rendering an opinion and decision [111] 
which, in the respects above enumerated, are con- 
trary to the law and the regulations, and not sup- 
ported by the evidence in the case. 

/s/ JOSEPH D. BRADY, 

/s/ WALTER L. NOSSAMAN, 

Attorneys for Petitioner on 
Review. 

Service of the foregoing is hereby acknowledged 
this 20th day of June, 1947. 

COMMISSIONER OF INTER- 
NAL REVENUE, 

Respondent on Review. 

[Endorsed] : Piled T.C.U.S. June 20, 1947. [112] 
By J. P. WENCHEL, CAR, 



Com. of Internal Revenue 127 

[Title of Circuit Court of Appeals and Cause.] 

DESIGNATION OP THE PORTIONS OF THE 
RECORD, PROCEEDINGS AND EVI- 
DENCE TO BE CONTAINED IN THE 
RECORD ON REVIEW 

To the Clerk of the United States Circuit Court 
of Appeals for the Ninth Circuit: 

Please take notice that the Estate of Homer 
Laughlin, deceased, Beach D. Lyon, Administrator 
with will annexed, petitioner on review, hereby 
designates the entire record in the ahove-entitled 
proceeding which the petitioner on review thinks 
necessary for the consideration of the United States 
Circuit Court of Appeals for the Ninth Circuit on 
review of the decision of the Tax Court of the United 
States in said proceeding entered on March 26, 1917. 
Said record consists of the following documents and 
records : 

1. Docket entries of the proceeding. 

2. Pleadings : 

(a) Petition, including annexed Exhibit A 
(copy of deficiency [113] notice with state- 
ment attached) ; also Exhibits B and C. 

(b) Answer. 

3. Opinion. 

4. Commissioner's Rule 50 Computation filed 
February 17, 1947. 



H30 Estate of Homer Laughlin, vs. 

In testimony whereof, I hereunto set my hand and 
affix the seal of The Tax Court of the United States, 
at Washington, in the District of Columbia, this 3rd 
dav of July, 1947. 

[Seal] /s/ VICTOR S. MERSCH, EMT 

Clerk, The Tax Court of the 
United States. 
[Endorsed]: No. 11686. United States Circuit 
Court of Appeals for the Ninth Circuit. Estate of 
Homer Laughlin, Deceased, Beach D. Lyon, Ad- 
ministrator with the will annexed, Petitioner, vs. 
Commissioner of Internal Revenue, Respondent. 
Transcript of the Record. Upon Petition to Review 
a Decision of The Tax Court of the L'nited States. 

Filed July 14, 1947. 

/s/ PAUL P. O'BRIEN, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 11686. 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



Estate of Homer Laughlin, 

Deceased, 



Beach D. Lyon, Administrator with the will annexed, 

Petitioner, 

vs. 

Commissioner of Internal Revenue, 

Respondent. 



PETITIONER'S OPENING BRIEF. 



Joseph D. Brady, 
Walter L. Nossaman, 

c/o Brady & Nossaman 
433 South Spring Street 
Los Angeles 13, 

Attorneys for Petitioner, 



PAUL 



Parker & Company, Law Printers, Los Angeles. Phone TR. 5206. 



TOPICAL INDEX 

PAGE 

Opinion below 1 

Jurisdiction 1 

Question presented 2 

Statutes involved 2 

Statement of the case 3 

Specification of errors 4 

Summary of argument 5 

Argument 6 

I. 

Effect of Sections 22(k), 171(b) and related sections 6 

II. 

Effect of certain proceedings had in determining the estate tax 

on Homer Laughlin's estate 16 

Conclusion 18 

Appendix : 

Excerpts from Internal Revenue Code and Regulations 111 

App. p. 1 



TABLE OF AUTHORITIES CITED 

Cases page 

Burnet v. Whitehouse, 283 U. S. 148, 9 A. F. T. R. 1414 13 

Dobson v. Commissioner, 320 U. S. 489, 31 A. F. T. R. 773 18 

Helvering v. Pardee, 290 U. S. 365, 13 A. F. T. R. 819 13 

Koshland v. Helvering, 298 U. S. 441, 17 A. F. T. R. 1213 11 

Ledyard, Lewis Cass, C. C. H. Dec. 15,087(M), T. C, Mar. 20, 

1946 (app. dism. C. C. A. 2) 7 

Manhattan General Equipment Co. v. Commissioner, 297 U. S. 

129, 17 A. F. T. R. 214 11 

Maresi, Estate of, 6 T. C. 583, affd. 156 F. (2d) 929, C. C. A. 2 17 

Statutes 

Internal Revenue Code : 

Sec. 22(k) 2, 5, 6, 7, 8, 15, 17, 18 

Sec. 23 (u) : 2, 5, 6, 7, 15, 18 

Sec. 142 2 

Sec. 161 7, 13 

Sec. 162(b) 2, 5, 7, 8, 9, 13, 14 

Sec. 162(c) 9 

Sec. 162(d) 2, 7, 11, 13, 15 

Sec. 171(a) 2, 7, 13 

Sec. 171(b) 2, 5,6, 7, 8, 9, 10, 11, 13, 14, 15, 18 

Sec. 172 7, 13 

Sec. 272 1 

Sec. 812(b) (3) 15 

Sec. 1141 2 

Regulations 111: 

Sec. 29.22(k)-l 6, 15, 17 

Sec. 29.22(k)-l(a) 9, 10, 11, 14, 17 

Sec. 29.22(k)-l(b) 6, 17 

Sec. 29.23(u)-l 10, 1 1 

Sec. 29.171-2 10 

Sec. 29.162-1 15 

Senate Finance Committee Report, 1942 Revenue Act, 1942-2 
C. B. 569 12 



No. 11686. 
IN THE 



United States Circuit Court of Appeals 



FOR THE NINTH CIRCUIT 



Estate of Homer Laughlin, 

Deceased, 



Beach D. Lyon, Administrator with the will annexed, 

Petitioner , 

vs. 

Commissioner of Internal Revenue, 

Respondent. 



PETITIONER'S OPENING BRIEF. 



Opinion Below. 

The opinion of the Tax Court is reported in 8 T. C. 33. 
A copy is printed in the Record, at pages 90 to 116. 

Jurisdiction. 

This petition for review [R. 120-123] involves an as- 
serted deficiency in income taxes for the taxable year 
1942. The notice of deficiency is dated June 6, 1944 [R. 
12]. The taxpayer's petition for redetermination was 
filed with the Tax Court of the United States August 
25. 1944 [R. 20] under the provisions of Section 272 of 
the Internal Revenue Code. The decision of the Tax 



— 2— 

Court determining that there was a deficiency in income 
tax for the year 1942 in the amount of $7,747.89 was 
entered on March 26, 1947 [R. 119]. The case is brought 
to this Court by a petition for review filed by the tax- 
payer on June 20, 1947 [R. 126], pursuant to the pro- 
visions of Sections 1141 and 1142 of the Internal Revenue 
Code, the return of the tax in respect of which the claimed 
liability arises having been made to the Collector's office 
for the Sixth District of California [R. 4]. 

Question Presented. 

Taxpayer, during the year 1942, paid $9,600.00 to Ada 
Edwards Laughlin, divorced wife of the decedent Homer 
Laughlin, pursuant to a contract entered into between 
decedent and Ada Edwards Laughlin, incident to the di- 
vorce, providing for payment to Ada Edwards Laughlin 
of $800.00 per month for her life, in discharge of the 
decedent's legal obligation of support. The decedent's 
estate, the present petitioner, contends that the $9,600.00 
payment is deductible from the estate's income (Sections 
22 (k), 23 (u), 171(b), Internal Revenue Code). The 
denial of this deduction by the Commissioner and the 
Tax Court is the occasion of this petition for review. 

Statutes Involved. 

The statutes involved are Sections 22 (k), 23 (u), 
162(b), 162(d), 171(a), and 171(b), Internal Revenue 
Code. These statutes, or the parts thereof deemed nec- 
essary for the decision of this case, are set out in the 
appendix. 



— 3— 

Statement of the Case. 

On April 1, 1924, Homer Laughlin (sometimes referred 
to as Homer Laughlin, Jr.), and his then wife, Ada Ed- 
wards Laughlin, entered into a property settlement agree- 
ment [Ex. F; R. 53]. An action for divorce was insti- 
tuted in the Superior Court, Los Angeles County, by Ada 
E. Laughlin shortly thereafter against Homer Laughlin, 
an interlocutory decree being entered on September 24, 
1924, followed by final decree, September 29, 1925. The 
decrees [Ex. G; R. 67] approve and confirm the property 
settlement agreement, the final decree setting it forth in 
hacc verba [R. 68]. 

The $800.00 per month agreed to be paid by Homer 
Laughlin to Ada E. Laughlin during her life (to be re- 
duced to $300.00 per month if she remarried — an event 
which has never happened) were made, as the agreement 
[Ex. F, par. 1; R. 53] shows, for her support and main- 
tenance. It was stipulated that Homer Laughlin, Jr., had 
no substantial amount of community property at the time 
of the April 1, 1924, agreement, or at any time there- 
after during the continuance of the marriage between him 
and Ada Edwards Laughlin, his holdings consisting of 
property given to him by or inherited by him from his 
father, Homer Laughlin, Sr. 1 

The stipulated payments to Mrs. Laughlin were ex- 
pressly made an obligation of Homer Laughlin's estate 
[Ex. F, par. 10; R. 65]. The $9,600.00 payment made 



'The above statement is made in view of the fact that the prop- 
erty settlement agreement [Ex. F, pars. 6 and 7; R. 58, 59] con- 
tains customary recitals whereby each party released any interest 
in the property of the other and the wife released any interest in 
the community property. 



-4— 

during the year in question, 1942, was made by petitioner 
pursuant to the agreement of April 1, 1924, and the di- 
vorce decrees [R. 36]. 

Homer Laughlin died on December 27, 1932 [R. 32]. 
Beach D. Lyon is, and during the year 1942 was, ad- 
ministrator with will annexed of his estate [R. 4, 12]. 

Further facts relating to an alleged deduction of the 
Ada E. Laughlin claim for estate tax purposes in the 
estate of Homer Laughlin, deceased, will be referred to 
in an appropriate connection (see p. 16, infra). 

Specification of Errors. 

Petitioner respectfully submits that the Tax Court 
erred, 

1. In holding and deciding that the sum of $9,600.00 
paid by the petitioner to Ada Edwards Laughlin during 
the taxable year 1942 was not deductible for federal 
income tax purposes from the income of the petitioner for 
that year. 

2. In holding and deciding that there was any de- 
ficiency in any sum whatever in the payment of the peti- 
tioner's federal income tax for the taxable year 1942. 

3. In rendering an opinion and decision which, in the 
respects above enumerated, are contrary to the law and 
the regulations, and not supported by the evidence in the 
case. 



— 5— 
Summary of Argument. 

Section 22 (k). Internal Revenue Code, provides for 
including in the income of a divorced wife, periodic pay- 
ments made in discharge of a legal obligation arising out 
of the marital relationship which is imposed upon the hus- 
band by the divorce decree or a written instrument inci- 
dental thereto. The coordinate provisions of Section 
23 (u) allow a deduction to the husband, of such payments. 
Section 22 (k) in the concluding sentence refers to Sec- 
tion 171(b) for the rule governing cases "where such 
periodic payments are attributable to property of an estate 
or property held in trust" (emphasis supplied). Section 
171(b) expressly states that "for the purposes of com- 
puting the net income of the estate or trust and the net 
income of the wife," the latter "shall be considered as the 
beneficiary specified in this supplement" — that is, pay- 
ments to her are deductible under Section 162(b), being 
given the tax status of "income * * * which is to be dis- 
stributed currently by the fiduciary to the legatees, heirs 
or beneficiaries" (Sec. 162(b)). 



Argument. 

We shall discuss the case under two main headings, 
namely 

I. Effect of Sections 22(k), 171(b) and Related 
Sections. 

II. Effect of Certain Proceedings Had in De- 
termining the Estate Tax on Homer Laughlin's Es- 
tate. 

Taking up these points in order: 

I. 

Effect of Section 22 (k), 171 (b) and Related Sections. 

Preliminarily, it is clear that if Homer Laughlin were 
living he would be entitled to the benefits of Section 
23 (it), allowing a deduction to the husband for amounts 
includible in the wife's income under Section 22(k). We 
have here a case of a wife "who is divorced * * * from 
her husband under a decree of divorce." (Sec. 22(k).) 
The payments are made "in discharge of * * * a legal 
obligation which, because of the marital or family rela- 
tionship, is imposed upon or incurred by such husband 
under such decree or under a written instrument incident 
to such divorce. ,, 

Except in one respect which will be noted below, the 
payments come within the strictest interpretation of the 
Commissioner's own regulations. See Regs. Ill, Sec. 
29.22(k)-l(a), infra, p. 9. No part of the pay- 
ments is attributable to "any interest in property trans- 
ferred in discharge of the husband's obligation under the 
decree or instrument incident thereto, which interest origi- 
nally belonged to the wife." (Reg. Sec. 29.22(k)-l(b).) 



—7— 

It is agreed [R. 38] that Homer Laughlin, Jr., did not 
possess at the time of the settlement agreement of April 
1, 1924 [Ex. F; R. 53] or at any time thereafter during 
the subsequent brief period of his marriage to Ada Ed- 
wards Laughlin, any substantial amount of community 
property. 

The question of property rights does not enter into 
this controversy, the sums in question being payable, as 
paragraph 1 of the contract provides, "for the support 
and maintenance" of the wife. Apropos of a similar con- 
tract, the Tax Court has said, in Lewis Cass Lcdyard, 
C. C. H. Dec. 1S,087(M), T.C., Mar. 20, 1946 (app. 
dism., C. C. A. 2): 

"* * * The fact that the Fourth Paragraph con- 
tains mutual releases of dower and other property 
rights does not justify the conversion of a part of a 
fund provided for maintenance and support into a 
payment for release of such rights. The mutual re- 
leases have no apparent connection with the settle- 
ment of the wife's rights to maintenance and of the 
obligation of petitioner to support his minor child." 

The payments of $800.00 per month made during 1942 
would clearly have been deductible by Homer Laughlin 
(Int. Rev. Code, Sec. 23 (u)) and included in Ada's in- 
come (Sec. 22(k)), if Homer had been alive during 1942. 

What is the effect of Homer Laughlin's death? Is his 
estate, now the payor, entitled to deduct these payments? 

The answer is. Yes, if Ada Laughlin is a "beneficiary" 
as that term is used in Supp. E (Estates and Trusts), 
Sections 161-172, Internal Revenue Code, 



— 8— 

Section 171(b), Internal Revenue Code, provides: 

"Wife considered a beneficiary. — For the pur- 
poses of computing the net income of the estate or 
trust and the net income of the wife described in 
section 22 (k) or subsection (a) of this section, such 
wife shall be considered as the beneficiary specified 
in this supplement. A periodic payment under sec- 
tion 22 (k) to any part of which the provisions of 
this supplement are applicable shall be included in 
the gross income of the beneficiary in the taxable 
year in which under this supplement such part is 
required to be included. ,, (Emphasis supplied.) 

Now a Section 22 (k) "wife" is, inter alia, by definition, 
an ex-wife "divorced * * * from her husband," receiv- 
ing p